BoE interest rate decision

1. BoE is to announce it’s interest rate decision on Thursday and is expected to remain on hold at +0.50%.
2. Currently, the probability of BoE remaining on hold seems to be at 88.53% as implied be GBP OIS. Hence, market focus is expected to shift to the accompanying statement and vote count.
3. Analysts consider the accompanying statement could mention the uncertainty of the Brexit negotiations and on the other hand a healthy Average weekly earnings growth rate, low unemployment rate and still high inflation rate.
4. Overall should the accompanying statement have a more hawkish tone we could see the pound getting some support.

US to pull out of Iran Nuclear deal

1. President Trump on Tuesday announced that the US will re-impose economic sanctions on Iran, practically cancelling the existing deal with Iran for nuclear weapons.
2. The sanctions are expected to hit Iran’s oil, finance and shipping industry and could be subject to a wind down period of 90-180 days.
3. Iran currently seems to be sticking to the deal, France, Germany, UK, EU, Russia and the UN expressed disappointment and concern about the US stance. The UN secretary general Guterres called for the other members of the treaty to stick to it.
4. Any further instability in the region could increase oil prices as well as strengthen safe havens.

Today’s other economic highlights

• Norway: CPI for April, Survey:+2.3% yoy Prior:+2.2% yoy, 06:00 (GMT), could strengthen the NOK Core CPI for April, Survey: +1.3% yoy Prior:+1.2% yoy, 06:00 (GMT), could strengthen the NOK
• Sweden: CPI rate for April, Survey: +1.7%yoy Prior: +1.9% yoy, 07:30 (GMT), could weaken the SEK Riksbank Executive Board meeting (07:00, GMT)
• Canada: Building Permits for March, Survey: +2.0%mom Prior: -2.6%mom, 12:30 (GMT), could strengthen the CAD
• US: PPI for April, Survey: +1.7% yoy Prior: +1.9% yoy, 12:30 (GMT), could weaken USD
  Core PPI for April, Survey: +2.4% yoy Prior: +2.7 yoy, 12:30 (GMT), could weaken the USD
• EIA weekly crude oil stocks, Survey: -0.719M Prior: +6.218M, 14:30 (GMT), could strengthen oil prices
• Speakers: FOMC member Raphael Bostic speaks (17:15, GMT).

IronFX Daily News ‘May 9th’