• BoE meeting is bound the steal the show during the day, a rate hike widely anticipated
  • New FED chair and tax bill announcements are the most important events for the US dollar
  • Some central bank speakers on the agenda, Powell among others

Thursday is the day of reckoning for the British pound as the BoE is expected to lift interest rates by 25 bps even as some economists, policymakers warn it would be a risky move give the state of play of the economy. Additionally, there will be announcements as for the new FED chair and a US tax bill which could make the GBPUSD one of the most volatile pair today.

9:30 am BST – UK construction PMI: Although, it’s a worth looking indicator investors’ attention will be paid elsewhere, hence it’s expected to carry little ramifications barring hefty deviations from the consensus. Let us recall that manufacturing PMI beat the forecast on Wednesday, however the GBP was unimpressed with it as the manufacturing industry isn’t the most important one in the UK economy. However construction spending has slowed down of late and once today’s release comes in below projections, it could call into question a rate hike in November. The forecast points to 48.5 for October. Beside the UK print there will be final readings from the European economies.

12:00 pm BST – BoE meeting: The BoE meeting is the most interesting event today as it’s expected to result in an interest rate rise by 25 bps. Even as the broad consensus suggests that a hike is a done deal there are many economists and strategists defying this move arguing it might backfire in the nearest future. On the other hand the BoE is heavily focused on inflation hovering much above its goal along with the jobless rate being below its natural level (below the estimated level wage pressures are expected to come, so the BoE wants to do a preemptive rate increase). However, real wage growth remains lackluster, economic momentum has gone off the boil recently and lingering Brexit talks could be another detrimental factor to the UK economy. Either way a hike is broadly expected (virtually fully priced in), 3 dissenters could emerge though. Bear in mind that the minutes and the inflation report will be announced at the same time.

3:15 pm BST – House Republicans is going to unveil tax reform bill

7:00 pm BST – US President Donald Trump will announce his choice for FED chair

Central bank speakers:

  • 11:15 am BST – Norges Bank’s Matsen
  • 12:30 pm BST – BoE’s Carney (following the decision)
  • 12:30 pm BST – FED’s Powell (any hints as for a Trump’s choice will be sought)
  • 4:20 pm BST – FED’s Dudley
  • 10:15 pm BST – FED’s Bostic

link do file download linkThe GBPUSD is hanging around a key technical resistance at 1.3300. It seems that a sell facts scenario could be likely during the BoE meeting. Source: xStation5