Economic wrap: BoE's next move could be either direction - Westpac

Analysts at Westpac offered an economic wrap.

Key Quotes:

"The Bank of England kept the policy rate at 0.25% and reaffirmed it neutral stance, as expected. The vote was unanimous. The growth outlook was upgraded, citing a looser fiscal stance, the inflation forecast was unchanged, and equilibrium unemployment was lowered. The BoE said the next monetary policy move could be in either direction.

US unit labour costs rose 1.7% in Q4 (vs 1.9% expected) with Q3 revised 0.5ppts lower. The benign messaging here matches the softer ECI data released earlier this week.

Economic Event Risks Today

China’s official PMI’s reported robust results in January and the Caixin manufacturing index is likely to follow suit. Markit service PMIs for the Euro Area, UK and US are also due, as is the ISM non-manufacturing survey.

Key event will be the release of January’s US nonfarm payrolls. The ISM manufacturing employment index and ADP private payrolls point to upside risks to our 170k forecast. However, a sharp deterioration in the non-manufacturing PMI in December offsets these risks somewhat.

The Fed’s Evans starts off the post-meeting run of Fedspeak, discussing economic conditions."