Previous Day's Market Highlights
Sterling rallied slightly in the afternoon session after Prime Minister May’s Brexit vote victory. Investors had been concerned that a defeat could increase the chances of a challenge to May’s leadership, adding to political uncertainty. Sterling-dollar pulled back above 1.32, recouping some ground from the previous day’s seven-month low. However, it gave up those gains overnight. Euro-dollar continued to hold below 1.16 and sterling-euro gained back towards 1.14.
Elsewhere, Fed Chair Powell was hawkish during comments at the ECB’s Forum on Central Banking, saying there is a “strong” case for more rate hikes in the US. The Fed’s median view now anticipates a total of four rate hikes this year, as opposed to three.
Sterling hit a seven-week high against the Canadian dollar before paring gains.
|Currency Pairing||08:00 Today||Vs 08:00 Yesterday||Four-Week High||Four-Week Low||% Change|
Today's Market Highlights
The main event today is the Bank of England’s latest policy decision (12:00 BST). The BoE is expected to keep interest rates on hold at 0.5% by an unchanged vote of 7-2. The Bank will likely keep the door open for a rate hike later in the year, depending on how data perform in the intervening time. Investors will closely parse the statement and vote breakdown for any changes that could provide policy hints or clues to the timing of a possible rate hike.
In particular, they will look for any signals that August is in play amidst concerns over slow Q1 growth and political uncertainty. A relatively cautious view could weaken the pound, while any upbeat signals could instead give it a boost.
In the US, Initial Jobless Claims are expected to remain largely unchanged at 220K, while the Philadelphia Fed Manufacturing Survey is expected to dip from 34.4 to 29.0. In the evening, BoE Governor Carney and Chancellor Hammond will deliver their Mansion House Speeches. Markets will pay close attention to these speeches for any further monetary policy and Brexit clues.
Today's Economic Calendar
|9:30am||GBP||Public Sector Net Borrowing (May)||£5.00B||£6.23B|
|12:00pm||GBP||BoE Interest Rate Decision||0.5%||0.5%|
|12:00pm||GBP||BoE Monetary Policy Summary & Minutes|
|1:30pm||USD||Initial Jobless Claims (8 Jun)||220K||218K|
|1:30pm||USD||Philadelphia Fed Manufacturing Survey (Jun)||29.0||34.4|
|2:00pm||USD||Housing Price Index MoM (Apr)||0.3%||0.1%|
|3:00pm||EUR||Preliminary Eurozone Consumer Confidence (Jun)||0.0||0.2|
|9:15pm||GBP||BoE Governor Carney's Mansion House Speech|