London Raised Rates After The Dollar Hit A Five Week Low

At noon in London on Thursday the Bank of England raised Bank Rate a quarter point, from 3.75 to 4 percent, its first increase since August 2023, with eight members of the Monetary Policy Committee voting for it and one voting for half a point, MoneyWeek reported. The committee's own forecast, as MoneyWeek relayed it, has UK inflation reaching 5 percent by the middle of 2027, against 3.5 percent in the twelve months to September.

Bailey, in words MoneyWeek published, said the increase “shouldn't be seen as the first in an inevitable long sequence of hikes,” and then added that “unless the conflict in the Middle East is resolved, neither does it seem likely to be the last increase.” Gilt yields rose slightly after the announcement, the same live report said, and were little changed against the declines of recent days.

The day before, with the Associated Press reporting that Democrats had won majorities in both chambers of Congress, the US Dollar Index fell 0.5 percent to about 101.31 on Wednesday, a five-week low by Kitco's count as Discovery Alert reported it, and spot gold rose about 3.4 percent, its largest single-day gain since 19 August, according to the same report.

Wall Street read the same result from a different seat. CNBC, as carried by Stock Titan, put Wednesday's closes at 53,356.12 for the Dow, up 1,569.40 points or 3.03 percent and its best day since 9 April 2025, 7,688.62 for the S&P 500, up 1.58 percent, and 25,736.51 for the Nasdaq Composite, up 1.44 percent. US crude futures settled at 88.12 a barrel, down more than 8 percent, and CNBC reported that Vice President Vance blamed the Iran war for his party's losses.

The market read the vote. The committee read the war.

Gold carried the move into Thursday. Spot gold stood at 4,134.83 an ounce at 0316 GMT, up almost 2 percent and the highest since 22 October, and December futures were at 4,144.20, up 1.8 percent, Discovery Alert reported. A RoboForex note had gold near 4,125 without stating a time or the instrument, so this letter uses the first figure with its stamp.

The ten-year Treasury yield sat between 4.87 and 4.89 percent in early Thursday quotes, down from Wednesday's level, which sources put between about 4.93 and 4.95 percent; the quotes differ by source and by the minute. Yesterday this letter printed 4.96 percent as the Associated Press premarket reading. This letter did not find Wednesday's closing print.

Futures traders have an opinion about the Federal Reserve. Discovery Alert, citing CME FedWatch, put the market-implied chance of a December Fed hike at 82 percent. That is a probability priced by traders, from a single secondary report, and it is not a statement from the Fed.

Oil is harder to pin. WTI has a settlement, 88.12. Brent has none that this letter could find. Early Thursday quotes put it at 93.82, down 80 cents, per Reuters at 0426 GMT as carried by Yahoo Finance, and at 96.15, up 1.6 percent, per Cornerstone Futures at 6:30 a.m. Eastern. Both are intraday and this letter cannot reconcile them.

One correction of emphasis. Yesterday this letter printed the IRGC's claim of four destroyed tankers. This letter found no outside confirmation of it this morning, and one aggregator describes a different IRGC claim, two tankers and a tugboat on fire, which this letter has not confirmed either.

Eight votes for a quarter point. One for a half.

Thursday premarket, at 5:25 a.m. Eastern, TipRanks had Dow futures up 0.49 percent, S&P 500 futures up 0.05 percent and Nasdaq-100 futures down 0.53 percent. Those are premarket readings and will change at the open.

The calendar begins at 8:30 a.m. Eastern. Weekly jobless claims arrive Thursday, with the prior reading at 194,000, Yahoo Finance's calendar showed. Challenger reported October announced job cuts of 43,994, down 71 percent from a year earlier.

On Friday at 8:30 a.m. Eastern the October payrolls report is due. The Reuters survey consensus, as Discovery Alert reported it, is 65,000 jobs against 29,000 in September, with unemployment at 4.2 percent. Next week the Treasury sells 58 billion in three-year notes, 42 billion in ten-year notes and 25 billion in thirty-year bonds, as Reuters reported yesterday.

This dossier wasn’t meant for everyone.