Another ‘Super Thursday’ courtesy Bank of England

Super Thursday is back.

…………… thanks to Bank of England’s (BOE), mega releases and events. Today Bank of England (BOE) will announce its regular monetary policy along with minutes. What makes today special is quarterly inflation report, which will be followed by a speech from Governor Mark Carney.

All the three releases individually have enough firepower to generate volatility spikes and release of all three might cast a storm over pound based pairs. All will though depend on wordings.

Preview of the four –

• Monetary policy decision – No major change is expected from interest rates point of view, however dovish or hawkish tone in the policy statement might set the mood for the pound and gilts.

• BOE minutes – This release will be the center of the focus for today. The focus will be on the number counts of doves and the hawks. Some members including Governor Carney have indicated that rate hike could be the next move.  At a meeting earlier this year, Kristin Forbes surprised the market by opposing the status quo by calling for an increase in the interest rate. So, it would be interesting to see if others would join her or she would be the sole dissenter once more.  

• Quarterly inflation report – Possibilities are high that tone might be hawkish while forecasting inflation as several indicators pointed to sharp a rise in the cost.

• Mark Carney speech – Mr. Carney is most likely to exert his firm view over interest rate neutrality with hawkish forward looking but he is also like to point out that now may not be the time to hike rates. The market would be interested in his comments on the ongoing Brexit negotiations and his take on the future of euro clearings in London.

Pound is currently trading at 1.292 against the dollar, and is expected to move higher by breaking the 1.3 barrier.