Daily Brief- November 07 – Economic Events Outlook – BOE Monetary Policy On Radar!
Arslan Butt • 2 min read
Good morning, traders.
During the early Asian session, the U.S. dollar crept lower than the Japanese yen as lingering suspicions about when the United States and China will sign a partial trade agreement confused traders from taking large trades.
The GBP/USD trades near a one-week low ahead of the Bank of England policy decision later in the day. Economists are expecting no change in policy; however, the traders are focused on how the BoE will react to risks postured by Britain’s fraught departure from the European Union.
Investors are also expecting the outcome of a general election on December 12, which will decide whether the ruling Conservative Party can achieve a majority in Parliament and cause Brexit by the January 31 deadline.
Watchlist – Economic Events Outlook
EUR – EU Economic Forecasts – 10:00 GMT
The European Commission is likely to release EU Economic Forecast, which serves as the European Commission’s basis for evaluating economic performance and trends of EU member states regarding potential austerity measures and other forced spending cuts.
This statement covers economic projections for EU member countries over the next 2 years and includes approximately 180 variables. It will be interesting to see the European commissions forecast about Eurozone nations as it will help us drive the market sentiment about the next policy decision.
Hawkish projections may support the single currency Euro today, and vice versa.
GBP – Monetary Policy Decision – 12:00 GMT
With the Brexit can having been hammered down the street and an election asked for December 12, a shift in strategy is very high. Sterling has soared by 7% since mid-August in the wake of trade-weighted sentiments.
Both the Federal Reserve and the European Central Bank have already diminished rates, and now all eyes stay on the BoE. Businesses, investors, and officials have had a couple of fire-drill like approaches to Brexit.
After the traders absorbed the FOMC announcement and Powell’s press conference, its view of a December rate hike was inherently stable, as shown in the fed funds futures.
The BOE is highly anticipated to keep the interest rates on hold at 0.75% vs. 0.75% beforehand. While the MPC official bank voting also remains steady at 0-0-9. Sterling may remain supported over the release of the news.
The Bank of England Governor Mark Carney is due to hold a press conference, along with other MPC members, about the Monetary Policy Report, in London.
The Bank of England is widely predicted to keep its primary interest rate at 0.75% despite the depressing economic backdrop. Lately, Governor Mark Carney has announced that the acceptance of a Brexit deal would drive a recovery in the investment sector. That would boost growth and potentially point to one or two quarter-point interest rate hikes.
That’s it for now, stay tuned to FX Leaders for quick trade plans and forex trading signals. Good luck!