Sterling rallied yesterday after Bank of England Governor Mark Carney signalled the BOE could be looking at raising interest rates in the coming months. He stated ‘some removal of monetary stimulus is likely to become necessary’ causing Sterling to push back up towards pre-UK election levels. The hawkish statement contradicts what he said last week in his Mansion House speech, that now was not the time to be raising rates.
The Euro appreciated yesterday following ECB President Mario Draghi comments at the ECB forum in Portugal. Draghi stated that the current feel of global uncertainty has urged the ECB to remain in a more patient position in terms of its monetary stimulus. Draghi went on to reassure that they believe the policy is currently working to the best of its ability and they are prepared for the upcoming recovery period for the Euro “all the signs now point to a strengthening and broadening recovery in the Euro area”.
The only high tier data released today will be from the US, in the form of the weekly unemployment claims figure and the final GDP figure. Unemployment claims are forecast to remain static, whilst GDP is expected to remain sticky at 1.2%. This is the third reading of the GDP figure. Back in the UK, the House of Commons will be voting on the Queen’s speech today. After narrowly winning yesterday, by 323 to 309, to scrap Labours amendment to the bill, Theresa May faces another tough day in the House of Commons. If even a small number of the Conservative MPs rebel or abstain, she will have lost her majority.