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Boris Johnson’s comments stun the Pound

Last week was mainly focused on the release of the Fed minutes seen on Wednesday evening, followed by the ECB’s own minutes on Thursday afternoon. The minutes from the Fed were more on the dovish side as all members cited concerns about the picture of the US economy now becoming more clouded. This is due to the slowdown of global growth and the recent declines seen in the equity markets. Although an increase to the rates are not on a predetermined path, the Fed have still left a possible increase on the table again for this year.  The contrast of the ECB’s policy was highlighted again on Thursday as the minutes showed that the central bank could be on course to add further QE, to help combat the low inflation and boost the flagging growth.  This puts more focus on their next meeting come the 10th of March to see if the trigger is pulled and what further measures they will implement. 

Over the weekend, PM David Cameron announced the deal on the new membership terms to the EU and that the referendum on the membership will be on the 23rd June. Sterling rallied initially as a result of these comments, but after the Mayor of London Boris Johnson stated that he would back the UK to exit the EU campaign the pound dropped and suffered its biggest decline against the greenback in a year.  


Today is dominated with services and manufacturing PMI readings being posted from the euro zone. All data will be scrutinized leading up to the ECB’s meeting on the 10th March as further QE could be seen at this meeting. 

  • Euro Services PMI
  • Euro Manufacturing PMI


The main focus will be on the BoE’s head Mark Carney, as he and several MPC will testify on the current outlook of the UK’s inflation before the Treasury Committee. As this is one of the main indicators for the BoE to raise rates, any insight into when inflation is likely to hit the 2% target will be watched for. Also from the US the Consumer Confidence reading is released. 

  • German IF Business Climate
  • UK Inflation Report Hearing
  • US CB Consumer Confidence


The middle of the week and is the quietest of the week with no high tier data released. The US post the New Home Sales figure where it is expected to decline, followed by their Crude Oil Inventories which looks at the number of excess oil held by commercial firms. 

  • US New Home Sales
  • US Oil Inventories


Inflation comes into the picture again for the single currency zone as the y/y CPI figure is posted at 10am. The ECB are ready to pull the trigger on further QE stimulus if inflation for the Euro zone continues to drag, and as such this release will be watched to see if it is still falling or improving. Later in the day, the US Durable Goods orders m/m figure will be released. 

  • UK 2nd Reading of Q4 GDP
  • Euro CPI y/y
  • US Durable Goods orders


The week ends with mainly US data releases.  The main focus will be the second reading of Q4 GDP as it is forecast to drop from the first 0.7% reading to 0.4%.  If this drop is seen it could bring further doubt that the Fed will be inclined to raise rates as this will suggest the economy is showing signs of slowing down. 

  • US 2nd Reading of Q4 GDP