May encourages ministers to have a united position on Brexit
- GBP - Second Estimate GDP q/q
- EUR - ECB Monetary Policy Meeting Minutes
- CAD - Core Retail Sales m/m
The Dollar boosted overnight, as the Fed released the minutes from their latest monetary policy. Despite not raising rates in the January meeting, the minutes indicated they were still on path to continue raising rates this year. The minutes showed the Fed had received a briefing as to why the models used to forecast inflation had been inaccurate. It had failed to include transitory factors, such as a change in mobile phone pricing. The Fed also believe inflation will move up to the 2 percent target, over the ‘medium term.’
- CAD - CPI m/m
- EUR - German Final GDP q/q
- USD - FOMC Member Dudley Speaks
UK Prime Minister, Theresa May met with 11 of her senior ministers at the Prime Minister’s country house, Chequers, yesterday. The meeting was called to discuss a united position on Brexit and the UK’s future relationship with the EU, as the Government appears to have been at a deadlock on certain issues over the past few months. One of the agreements made was for the UK to the stick to the EU rules, but on the UK’s own terms. However, the EU have previously accused the UK of ‘cherry picking’ the deal.
The Euro remained relatively stable yesterday as the European Central Bank released its latest monetary policy meeting accounts. The minutes showed no change in stance on the policy statement as the weak inflation meant it was too early to change this stance. However, they indicated they would revisit the policy again ‘early this year.’ The accounts also showed some of the members wished to drop the easing bias, which is a pledge to ramp up the buying on bonds if the economy needs it.
Today is set to be a quieter end to the week with no high tier data on the economic docket. Bank of England Deputy Governor, David Ramsden will be taking part in a panel discussion at the East of England Confederation of British Industry event on ‘Tackling the UK’s Productivity Challenge.’ Across the pond, the next set of FOMC speeches will take place. William Dudley and Loretta Mester will be taking part in a panel discussion at the United States Monetary Policy Forum. Dudley will be discussing the Fed’s balance sheet, whilst Mester will be talking about the objectives of monetary policy. Federal Reserve Bank of San Francisco President, John Williams, will round up the week speaking at the City Club of Los Angeles on the economic and monetary policy outlook.