Yesterday, the main focus was on the Bank of England and its Governor Mark Carney as we saw the release of the BoE Inflation report. This was shortly followed by a Carney-led press conference. Governor Carney said a vote to leave the European Union could cause a UK recession and that any monetary policy response would take time to work. Carney’s pro stay campaign comments gave Sterling a slight boost yesterday afternoon, as he issued his strongest warning of the Referendum risks yet. The BoE minutes also showed the committee voted unanimously 9-0 to keep rates on hold at last week’s meeting. The committee also downgraded growth forecasts this year, from 2.2% to 2%.
In other news, the US released their weekly jobless claims reading. Unemployment claims posted another poor reading this month, failing to meet expectations and registering at 294k as US data continues to lag. Economists’ are now forecasting only one rate hike this year and it’s safe to say that US data needs to improve substantially if the Fed are to raise rates this summer.
We finish the week with the first Q2 GDP reading from the Eurozone where market consensus is for it to remain at 0.6%. The release of the US monthly Retail Sales is to follow this in the early afternoon, where the main sales gauge is expected to fall again to -0.3% and if seen will show that consumers spending confidence is slowing and could see the Dollar weaken. Also released from the US is the first reading of the University of Michigan Consumer Sentiment where a slight increase is forecasted.