Market Insight

The latest analysis of popular markets from our team of industry experts.

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LCG TV: Decision time for BOE next week

The financial week beginning Monday 11th July opens right after the Japanese elections of the House of Parliament. Prime Minister Shinzo Abe and his coalition government are facing a real test. The USDJPY will be an interesting pair to watch and is likely to open with a higher degree of volatility.

On Tuesday investors will be waiting for the UK Inflation Report Hearings, when Bank of England Governor Mark Carney testifies on inflation and the economic outlook. The main event for Thursday will be the Bank of England monetary policy decision. Right now the official Bank rate is at 0.50% with asset purchases set at £375 billion. Traders will be waiting to see if the central bank is going to inject liquidity into the market through quantitative easing, or wait for further data before taking action.

The GBPUSD in particular could be affected after the Pound lost almost 20% of its value against the US dollar in the week just passed. On Friday we will have important data from China, which is going to publish the 2nd quarter GDP result, while we wrap up the week with several major US data releases- including industrial production, inflation data and retail sales. All this data will certainly be taken into account by the Federal Reserve ahead of the FOMC meeting at the end of July.