- Bank of England expected to raise rates
- However the SNB is seen leaving things unchanged
- Housing data is the key piece from the US today
Markets are still digesting the FOMC decision after rates rose by 75bp (150 already this year) but Chairmen Powell tried to assure a soft landing scenario rather than a much feared recession/stagflation outcome. Oversold indices rallied but there’s a risk of a repeat from May when the rally was short lived as the economic reality sunk in very quickly. The USD dollar index (USDIDX) backed off from the 20-year high but the Fed raises the bar high for other central banks that are less willing to move and this will be the focus today.
8:30 am BST – SNB decision – markets expect the Swiss bank to maintain rates at record low levels of -0.75%
12:00 pm BST – Bank of England decision. Expected hike from 1 to 1.25%. A larger move possible but unlikely
1:30 pm BST – US data pack
- Initial claims (expected 215k, previous 229k)
- Housing starts (expected 1700k, previous 1724k)
- Building permits (expected 1787k, previous 1823k)
- Philly Fed activity index (expected 5.3, previous 2.6)
3:30 pm BST – EIA natgas report
GBPUSD rebouned after the Fed decision yesterday but it needs a 50bp hike from BoE to stop a free-fall
