Europe stocks gain after BoE rate cut: NFP eyed

As Europe stocks gain after BoE rate cut, they moved toward a third rise this Friday. However, what will be the impact of today’s highly anticipated US NFP release? 

5 August, AtoZForex – The European stock markets extended the winning trend into a second day on Friday, building on the gains of the BoE’s decision to roll out the stimulus package to fight the Brexit fallout.

Europe stocks gain after BoE rate cut: details

Yesterday the Bank of England announced its decision to cut interests rates for the first time in almost 7,5 years. The rates were cut from 0.5% to 0.25%. Moreover, the BoE increased its government bond-buying program known as quantitative easing to combat the slump Brexit created in the UK economy.

European stocks moved toward a third rise this Friday as the equities are still soothed by the BoE’s stimulus efforts. However, the key US NFP data is still ahead. BoE’s action is a signal to the investors that the other central banks could also ease further. Such kind of decision would surely support equities.

What about banks?

The Italian banks have been causing concern in the Euro zone given their large collection of bad loans. Ministers in the Italian government have moved to play down fears over the lenders of Italy. Ignazio Visco, the governor of the Bank of Italy stated in his interview that public support for the banks cannot be ruled out.

Meanwhile, Royal Bank of Scotland (RBS) which is currently on of the UK’s “big four” banks, announced that it has experienced huge net loss of $2.7 billion for the first 6 months of 2016. This announcement sent shares into the negative territory. Some analysts say that despite the fact the BoE has cut the rates and initiated another bond-buying program, the investors are certain that it is only a beginning point for the bank.

See also: NFP data expectations & How to trade it?

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