Fast Europe Open: Bank of England rates decision

Malaysians awoke on Thursday to a new political era, as veteran opposition leader Mahathir Mohamad sealed victory in a historic general election that ends the ruling coalition’s six-decade grip on power. 

The win marked a stunning political comeback for the 92-year-old veteran south-east Asian leader (pictured) and a shock loss for prime minister Najib Razak who had led the country since 2009. But the ringgit was under pressure and Moody’s struck a cautious tone over the Malaysian economy. 

Local markets were closed but one-month currency forwards for the ringgit weakened as much as 4.7 per cent on Thursday before paring losses to be off 1.1 per cent on the day at 4.118, and down about 3.3 per cent from where it was trading before the vote.

Moody’s said that while “little was known” about Mr Mahathir’s economic policies it was wary about the proposed abolishment of a goods and services tax and the reintroduction of fuel subsidies. 

Asia-Pacific equities benchmarks were generally higher after a solid day on Wall Street, where the S&P 500 index finished 1 per cent higher as energy stocks received a boost from oil prices, which touched their highest levels since late 2014 in the aftermath of US President Donald Trump’s decision to pull the US out of the Iran nuclear deal and reimpose sanctions on the country.

Ahead of the Bank of England’s rates decision, futures tipped the FTSE 100 to open flat in London and the S&P 500 to add 0.2 per cent when trading started in the US. 

Corporate earnings slated for release on Thursday include Next, Rathbones, RSA Insurance, TP ICAP and BT Group. The economic calendar has a few UK-focused snippets before the main event (all times London):

  • 09.30: UK industrial output, construction and trade data 
  • 1200: Bank of England rates decision, inflation report

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