Summary:

  • UK retail sales may help set expectations ahead of the BoE meeting later today
  • Bank of England is anticipated to pave the way for a rate hike in May
  • US preliminary PMIs (both manufacturing and services) are going to be released in the afternoon

Wednesday was dominated by the Federal Reserve which chose to hike rates, now it’s the Bank of England turn. Even as it will not rise rates already today it could lay the groundwork for a rate hike in May and this is the point everybody is going to watch for. Before the BoE makes its decision there will be a retail sales reading for February which may help steer market expectations. While the session is going to be dominated by the UK data, the greenback will be offered some releases as well as both manufacturing and services PMIs are included in the calendar.

9:30 am BST – UK retail sales: The pound has been among the best performing currencies thus far this week, however, the major event for the GBP is still ahead. Nevertheless before the BoE announcement it’s worth paying a closer attention to retail sales for February which is going to be yet more important when real wage growth become positive (this could have happened already in February but the wage data needs to corroborate it in a month). The consensus for today points to 0.4% mom for both the core measure (stripping out auto fuel) and the headline. 

12:00 pm BST – Bank of England announcement: Rates will be kept on hold but focus will be on any hints with regard to the likelihood of a rate hike in May – a move the market is assigning as much as 65%. Keep in mind that there will be no a press conference of Mark Carney therefore everybody should zoom in on the statement as well as the minutes from the meeting. If market participants are able to read hawkish points into the statement the GBP could be offered fresh fuel to move forward.

1:45 pm BST – US PMIs: Both manufacturing and services PMIs are not forecast to deviate substantially from their latest readings for February therefore, if the match expectations, a net effect on the greenback may be mediocre. Either way, the data deserves more attention given the latest slump on the US currency following the Fed decision (despite quite the bullish fallout to be honest). Better than forecast readings could help the US dollar get back at least a dose of its lost mojo. Manufacturing PMI should show 55.5 points whereas services one is estimated to come in at 56 points – subtle improvements compared to the prior month.

Central bank speakers scheduled for today:

  • 8:30 am BST – ECB’s Lautenschlaeger
  • 9:00 am BST – ECB’s Nouy
  • 4:15 pm BST – Norges Bank’s Olsen
  • 5:00 pm BST – BoE’s Ramsden
  • 6:45 pm BST – BoC’s Wilkins

link do file download linkThe cable has broken out of a channel suggesting enhanced momentum following  the Federal Reserve meeting. The January highs seem to be in sight. Source: xStation5