Market Commentary: Thursday 8th May

Yesterday’s Fed meeting went as expected, with rates kept on hold. There was also little change in investor expectations, as three rate cuts are still priced in for the remainder of the year.

Today, we have the BoE decision, where a 25bps cut is well priced in. We also have rate decisions from Norway and Sweden this morning, where rates are expected to remain on hold.

The focus for the BoE will be whether any clues are given about next month’s meeting, as many expect back-to-back cuts in May and June. A stronger pound and weaker oil prices have eased inflationary pressures in the UK, while significant concerns around dwindling growth have fueled expectations of further easing.

The US is set to announce its first “major” trade deal later today—expected to be with the UK—a deal that originally began during Trump’s first term, leading some to downplay its significance as a broader sign of upcoming deals.

Market sentiment improved, with FTSE 100 futures rallying 0.7% and S&P 500 futures also up 0.7%.

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