After Wednesday’s conclusion of the FOMC meeting that failed the expectations of investors, Session 2 February brings “Super Tuesday,” a series of important publications of the Bank of England – already at 13:00 will be announced decision on interest rates, monetary policy statement, the minutes of the meeting and updated inflation report. Be aware that pound sterling can strongly move!
What we know and what are we waiting for? Calendar for Thursday
But before we proceed to a more detailed discussion of scenarios before BoE meeting summary, let’s look at the data that appeared in the calendar and to those which will appear. At night, about 0:30 GMT our time Australia shared the results of export-import. The trade balance turned out to be more than one billion US dollars higher than the assumed markets.
As for the macroeconomic calendar ahead of the BoE is worth paying attention to retail sales in Switzerland for December and PMI construction sector in the UK. At the start of the US session only some average major publications such as jobless claims, non-agricultural productivity or unit labor costs.
Bank of England unchanged, but GDP forecasts upwards
The consensus among analysts of largest investment banks ahead of the BoE is very similar – Mark Carney and the company does not present any significant changes in monetary policy, rhetoric, however, may take slightly hawkish, and forecasts for GDP will again be revised upwards.
According to Morgan Stanley, GBP/USD can reach levels of 1.27-1.28 before the end correction of the release, and realization of profits, and then return to the fundamental downward trend, which inter alia is due to the strong divergence of monetary policy in the US.
Given the good performance of the British economy in the fourth quarter, the Bank of England is likely to adjust their forecasts of GDP – on the other hand can, however, express concerns about the strength and durability of indices of consumer prices, especially in the face of high household debt. At the same time, inflation projections remain on rather constant level.
In the short term GBP may thus gain after the meeting, in a longer perspective, however, will continue to lose. At 12:30 also is scheduled a press conference M. Carney.
Dollar with the worst start in the new year for decades
At the end as a interesting fact a graph showing the January moves of US dollar in historical perspective. 2017 year brings so far the worst results since the 1987, when Ronald Reagan caused a depreciation of the currency in order to fight the flood of Japanese imports:
Strong slides in the coming years, however, brought strong increases. I wonder how the situation will develop by the time of presidency of the popular billionaire.
