ForexSpace.com - Yesterday was the ECB, today it’s the Bank of England taking centre stage, closely followed by Federal Reserve. Forex traders and brokers alike with be all ears for the BOE policy decision. The market expects rates to be left on hold at 0.5 percent and for asset purchases to remain at GBP325bn. However, as Kathleen Brooks (pictured), research director of FOREX.com says, “the outcome of this BoE meeting is more uncertain than usual because of some conflicting economic data. On the one hand PMI Manufacturing data fell to its lowest level last month for three years – back in the depths of the last recession. However,” adds Brooks, “on the other hand the services sector PMI held up better than expected. The May survey result was 53.3, versus 52.4 expected. Since the service sector makes up nearly three quarters of the UK economy, you could argue that as long as this sector is expanding the UK economy is on the right track. However, such a sharp drop in manufacturing combined with the Eurozone debt crisis is likely to leave the BoE on high alert.”

Certainly, QE has been driving the markets all morning. The FTSE, CAC and DAX are all trading higher by around 0.5 percent, while the IBEX is continuing to extend gains as the Spanish government look to get to grips with the ailing banking sector. Once the BoE has had its say, Ben Bernanke steps in to the spotlight of Capitol Hill where many anticipate he will be grilled in the wake of a third successive month of poor Non-Farm Payrolls which all but confirmed the slowdown in the U.S.

As Alpari UK’s market analyst Craig Erlam tells us: “The number of private sector jobs increased by only 69,000 in May, the smallest increase since September last year. Ben Bernanke is expected to at least discuss the prospect of QE in his press conference today, however further commitments in this quarter would appear unlikely with the presidential elections later this year. With the recovery slowing however, the Fed Chairman is stuck between a rock and a hard place, and may need to intervene earlier than originally planned.”

As in the United States early doors, we also have unemployment claims figures for last week. A number of around 381,000 is forecast, however – as Alpari’s Erlam opines, “following the jump in the jobless rate on Friday along with the poor employment data, I believe the number will continue to grow and could come in around 390,000.”

Drew Hillier. Editor