Daily Financial Breakfast 6 November 2026: BoE Lifts Rate to 4%; Fed's Williams Judges Inflation Too High

Market News Today: Rate Decisions and Technology Selling Shape Trading

• A 25-basis-point increase took Bank Rate to 4.00% at the Bank of England; on Friday, Chief Economist Huw Pill indicated that the course of rates next year had not been settled.
• With inflation having stayed excessively high for an extended period, New York Fed President John Williams considered this an appropriate point at which to gather additional information.
• September's 11.1% annual rise in eurozone producer prices provided the backdrop to a warning from ECB Chief Economist Philip Lane: energy inflation would shape wage negotiations and price-setting.
• An unexpected 25-basis-point reduction left Mexico's central bank policy rate at 6.25%, with the bank presenting the cut as a single adjustment.
• The yen gained ground on Thursday, while Bank of Japan minutes suggested that members saw room to accelerate rate increases should inflation overshoot expectations.
• Further increases in interest rates could be necessary, Bank of Canada Governor Tiff Macklem said before the House of Commons.
• Thursday's selling in technology shares pushed the Nasdaq Composite as much as 5% lower. Bitcoin, meanwhile, moved below $76,000 as crypto liquidations over 24 hours reached $1.08 billion.
• Unresolved concerns about Middle East supplies accompanied a second straight daily advance in WTI crude, to around $90.60 a barrel in European trading on Friday.
• According to the Times of Israel, President Donald Trump said U.S. approval was required before Iran could engage in activities connected with its nuclear programme.
• A potential security threat prompted Binance to revoke SignalPlus-linked API keys as a precaution.

Markets Register Diverging Moves

U.S. Equity Futures Trade Unevenly

Dow Jones futures stood around 51,170 after losing 0.85% in early European trading on Friday. Moving the other way, S&P 500 futures gained 0.06% to around 7,390, while a 0.90% rise took Nasdaq 100 futures to around 26,990.

EUR/USD Slips as AUD/USD Holds Near 0.6910

Friday saw EUR/USD retreat 0.4% to 1.1170. In the Asian session, AUD/USD traded near 0.6910 following the previous day's loss of more than 1%.

Central Banks Adjust Policy & Assess Economic Pressures

BoE Lifts Bank Rate to 4.00% With Energy Shock Set to Prolong Inflation

Thursday's 25-basis-point rise in Bank Rate to 4.00% secured the backing of eight Bank of England policymakers. Catherine Mann voted for a larger step of 50 basis points. Although the scale divided opinion, every policymaker favoured tighter policy.

At roughly 5% in the second quarter of 2027, the inflation projection in the November Monetary Policy Report compared with an earlier forecast of 3.2% in late 2026. The forecasts placed inflation's return to the 2% target no earlier than the third quarter of 2028. Should the energy shock worsen under the adverse scenario, inflation would climb to 6.2%.

Further rises could not be ruled out, Governor Andrew Bailey said, arguing that inflationary pressures still in the pipeline justified the decision. That did not, he cautioned, make a succession of increases inevitable. While evidence of second-round effects was scarce, the Bank warned that a prolonged period of high energy prices raised the likelihood of businesses passing costs on and workers seeking bigger wage settlements.

Revised near-term forecasts showed stronger growth, with the Bank projecting GDP to expand by 1.6% in 2026, then 1.3% in 2027 and 1.2% in 2028. Its outlook also included unemployment rising gradually and pay growing faster than previously estimated. The government's budget was expected to lower inflation for a time, before the impact subsequently reversed.

Reuters reported on Friday that Chief Economist Huw Pill expected uncertainty to increase from spring and said “nothing is baked in” for next year's interest rates. Bailey had not indicated when another rise might occur. Having initially gained after the decision and briefly exceeded 1.3500, GBP/USD was back near 1.3450 on Thursday evening as sterling relinquished those gains.

Fed's Williams Favours Gathering Information While Inflation Stays Elevated

Bringing inflation back to 2% in a timely manner was essential after it had been “too high for too long”, New York Federal Reserve President John Williams said on Friday, Reuters reported. His assessment of the U.S. economy remained one of remarkable resilience, alongside a stable and solid labour market.

According to Williams, prices had absorbed most of the effects of tariffs, whereas increased energy costs were becoming evident in airfares. Artificial intelligence had only a narrow effect on prices, he said, pointing to chips. He regarded inflation expectations as well anchored and pay growth as consistent with the Fed's goal. Given the year or two required for monetary policy to take effect, he viewed the present period as suitable for accumulating further information.

A gradual approach to tightening had drawn support from other Fed officials on Thursday. Identifying inflation as the central bank's most important risk, Richmond Fed President Thomas Barkin said it made sense to raise rates at a gradual pace. Reuters reported that Cleveland Fed President Beth Hammack saw gradual increases as less disruptive to both the economy and the financial system. Initial U.S. jobless claims fell to 189,000.

ECB's Lane Sees Energy Inflation Spreading to Wage and Pricing Decisions

Monetary policy needed to limit spillovers and restore inflation to target within a year or two, ECB Chief Economist Philip Lane said on Friday, according to Reuters. Energy inflation, he warned, would influence negotiations over wages and the setting of prices across the economy.

Although financial conditions had become tighter, unexpectedly robust exports were helping the economy, Lane said. He also noted a more expansionary fiscal stance than anticipated, while pointing to the ECB's expectation of tightening next year and beyond. Before December, he favoured collecting additional information; the system also required a sizeable liquidity buffer, he said.

Decisions on a rate increase would be guided by data received before December, President Christine Lagarde said on Thursday. She described an economic situation made more complicated by the energy shock and artificial intelligence exerting opposing forces. In September, eurozone producer prices were 11.1% higher than a year earlier.

Banxico Lowers Policy Rate to 6.25% Against Market Expectations

Expectations that the Bank of Mexico would keep its policy rate at 6.50% were confounded on Thursday by a 25-basis-point cut. Taking the rate to 6.25%, the reduction was described by Banxico as a “one-time adjustment.”

After the decision, the dollar strengthened against the peso. USD/MXN was trading at 19.74, compared with a low for the day of 18.96 reached earlier.

BoJ Minutes Leave Room to Accelerate Hikes if Inflation Exceeds Forecasts

Members considered a quicker pace of interest-rate rises possible if inflation proved stronger than expected, Bank of Japan minutes indicated. Thursday's sharp losses in U.S. technology and semiconductor shares coincided with gains for the yen against the dollar and outperformance against its major peers.

The slide in equities also saw U.S. Treasury yields decline. By later on Thursday, sterling, the euro, the New Zealand dollar and the Australian dollar were all weaker against the U.S. currency, in contrast to the yen's appreciation.

BoC's Macklem Keeps Additional Rate Increases in View

Speaking to the House of Commons, Bank of Canada Governor Tiff Macklem indicated that further interest-rate rises might be needed.

Equities Sell Off & Digital Assets Lose Ground

Nasdaq Sheds Up to 5% While Bitcoin Sinks Below $76,000

Fears of tougher regulation of AI and cryptocurrencies after Democrats secured both chambers of Congress accompanied steep losses on Wall Street on Thursday. AI-linked shares were at the forefront of the selling, as the Nasdaq Composite lost as much as 5% and the S&P 500 fell 3.5% during the session.

The gains Bitcoin had made in Wednesday's post-election rally were erased by a 24-hour fall of more than 5%, which sent it below $76,000. Declines of more than 6% apiece hit Ethereum, Solana and XRP. Across cryptocurrencies, total market capitalisation contracted 4.5% to $2.71 trillion.

Nearly $953 million in long positions were liquidated within the 24-hour crypto futures total of $1.08 billion. Liquidations over four hours amounted to nearly $900 million.

Energy Prices Rise & Geopolitical Tensions Persist

WTI Extends Gains Near $90.60 as Middle East Supply Worries Persist

Around $90.60 a barrel in Friday's European session, West Texas Intermediate crude was higher for a second day running. Ongoing conflict in the Middle East and unresolved worries about oil supplies accompanied the rise.

Trump Makes U.S. Approval a Condition for Iran's Nuclear Activities

The Times of Israel reported on Thursday that President Donald Trump had said approval from the United States was needed for anything Iran did relating to its nuclear programme.

Digital-Asset Firms Address Operational Risks

Binance Withdraws SignalPlus API Keys as Security Precaution

Application programming interface keys associated with SignalPlus had been revoked, Binance said in a Thursday announcement. SignalPlus is a third-party institutional technology provider. Binance characterised its response to a potential security threat as precautionary.

Markets Await Key Scheduled Releases

• U.S. October Nonfarm Payrolls Report Due (6 November 2026, 13:30 GMT): Following September's payroll increase of 29,000, the Bureau of Labor Statistics is due to publish the October employment report.