The Bank of England will be the last of the central bank meetings this week, announcing its policy decision tomorrow after the Bank of Japan and the Norges Bank.
More immediately, all eyes will be on the Fed decision and press conference this evening. Expectations are for the FOMC to open the door for easing policy if the economy loses momentum and/or inflation would drift lower.
The Bank of England is unanimously expected to stay on hold with its bank rate left at 0.75%. The MPC were fairly relaxed about the Q1 slowdown and blamed weather-related issues. However, today's core inflation of 1.7% y/y is not signalling any urgency to act in the near-term.
As we said before at the previous meeting, Carney & co are stuck in a holding pattern at present, given there is only one other 'super (QIR) meeting' until the new Brexit deadline. Markets are keen to see if Carney keeps the (slight) tightening bias.
Cable made new five month lows yesterday as Boris Johnson extended his lead in the Conservative Party leadership contest. The third round voting will take place later today with the results expected this evening, with the MP with the lowest number of votes to be eliminated. Weekly price action through last Friday was bearish, which highlights broader downside risks towards the mid-1.24s.
Here are the numbers to know ahead of the meeting:
Disclaimer: The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warrant that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, the author does not guarantee its accuracy or completeness, nor does the author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.The trading of Foreign Exchange, and other leveraged products involves significant risk of loss and is not suitable for all investors. Increasing leverage increases risk. Before deciding to trade forex, commodity or Index based CFDs you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that Capital Index (UK) Ltd is not rendering investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters.