Daily Report: May defeated in the House of Lords & BOC decided to remain Interest Rate on hold
Check out IronFX’s recent report! Here are the main market movers of the day.
May defeated in the House of Lords
- The House of Lords voted against a main part of PM May’s Brexit policy with a majority difference larger than 100 votes.
- Despite the vote not being binding, the heavy defeat of the government could be interpreted as a strengthening of the soft Brexit side and possible further defeats may lay ahead.
- On other news, the first day of negotiations ended with little progress as British negotiators received EU guidelines for the after Brexit EU-UK relationships.
- Should there be further negative headlines about Brexit or the inner UK political stage we could see the pound weakening.
BOC decided to remain on hold at +1.25%
- BoC decided to remain on hold at 1.25% with an accompanying statement which rather disappointed the hawks.
- The accompanying statement stated that progress on inflation and wages could reinforce that higher rates will be needed over time.
- On the other hand, it also stated that policy accommodation will still be needed to keep inflation on target and that BoC will be cautious with respect to future hikes.
- We see the case for the CAD to be rather sensitive to headlines which may come out later today regarding NAFTA, but also to the inflation data on Friday. Overall a correction to yesterday’s USD/CAD surge may also happen.
Today’s other economic highlights
- Eurozone: Current Account February, Survey: +32.3B Prior: +37.6B, 08:00 (GMT), could weaken the EUR
- UK: Retail Sales for March, Survey:-0.5% mom Prior:+0.8% mom, 08:30 (GMT), could weaken GBP
- US: Philadelphia Fed Mfg Index for April, Survey:20.8 Prior:22.3, 12:30 (GMT), could weaken USD
- Initial Jobless Claims, Survey: 230K Prior: 233K, 12:30 (GMT), could strengthen USD
- Speakers: FOMC members Lael Brainard (12:00 GMT) and Randal Quarles (13:30 GMT), as well as BoE MPC member Jon Cunliffe speak.