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Focus on Mark Carney’s Speech

• Posted by currencies in Bank of England, Brexit, Currency, Dollar, Economy, EUR, GBP, Sterling, UK, Uncategorised
• July 11, 2018
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In Europe, German Chancellor Angela Merkel said UK PM May’s new Brexit proposal, after Friday’s Cabinet agreement meeting at Chequers, was a “solid step forward”.

Today though, the market maybe more focused on BoE Governor Carney’s speech this afternoon in Boston, particularly with the August MPC meeting just over three weeks away.

Speaking in Newcastle last week, Governor Carney said that he is more confident that the Q1 GDP growth slowdown was temporary and that the economy is evolving as expected.

Yesterday’s release of a new monthly measure of UK GDP showed that the UK’s growth momentum picked up pace in the second quarter, with growth in the three-months to May reportedly up 0.3%, above the 0.2% quarterly pace recorded in the first quarter.

Any sign that the Governor is adopting a more positive tone following the data is likely to further support expectations of a hike at next month’s meeting, which is currently running around a 75% expectation.

Meanwhile in the US, a further uptick in the producer price report is expected, which would further bolster the likelihood of an acceleration in tomorrow’s CPI inflation readings.