• The UK industrial and manufacturing production figures are expected to continue rebound

  • Mark Carney may shake the markets during the post-meeting presser

  • The US CPI inflation has a potential for a positive surprise

Markets are still steered by the politics but today’s calendar may draw investors’ attention too. Especially GBP and USD traders will be delighted as BoE decision is to be announced at noon and the US CPI inflation figures will be released in the early afternoon. In the morning ECB will publish its Economic Bulletin (9:00 am BST).

9:30 am BST – UK, Manufacturing and Industrial Production for March. After a significant slump in December the UK manufacturing production figures rebounded somewhat. The story is similar when we take a look at the industrial production figures but in this case the slump came a month later. The rebound is expected to continue in both cases as the manufacturing production figures are said to increase to 2.9% YoY from 2.5% YoY and the industrial production figures are supposed to move from 2.2% YoY to 3.1% YoY.

12:00 pm BST – Bank of England Interest Rate Decision. The latest lacklustre inflation readings combined with a deterioration of soft indicators and more dovish stance of the UK central bankers, especially governor Carney, have smashed the chance of a rate hike at today’s meeting. A month ago OIS-implied probability of a rate hike at May’s meeting was almost 90% while today it is just 12.6%. Along with the decision the quarterly inflation report will be published and it may offer some deeper insight into the situation of the UK economy. One should be aware that increased volatility on the GBP tied FX pairs may surface at 12:30 pm BST as BoE Governor Mark Carney will hold post-meeting presser.

1:30 pm BST – US, CPI Inflation for April. The US inflation continues its rebound after it bottomed at 1.6% YoY in June 2016 urging Fed to tighten monetary policy. Economists surveyed by Bloomberg point for an uptick from 2.4% YoY to 2.5% YoY for the headline measure and to 2.2% YoY from 2.1% YoY for the core one. However, one should keep in mind that the base effect is lower than in previous month thus there is a potential for the positive surprise. Moreover, April’s reading will include a significant jump in the oil prices therefore this potential is even greater.

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After failing to surpass the 78.6% Fibo level of the Brexit slump GBPUSD reversed lower towards the 50% retracement level. Will Mark Carney bring relief to the GBP bulls during the post-meeting conference? Source: xStation5