Investors have once a gained pushed the US markets in a record territory yesterday when the S&P 500 made another all time high. Certainly, geopolitical tensions are not on their mind and they believed that European leaders will pay more attention to their own interest first before they agree on anything which can cut into their own flesh.
The growth is extremely fragile and weak in Europe and putting phase 3 sanctions on Russia could have a devastating impact on all the efforts by Mr Draghi. Moreover, one of the officials from the ECB did confirm yesterday that the rate cut by the ECB is working, but if we have seen that translated into the economic data, no, not yet, as it is too soon for such results to have their stamp on the data.
The main focus for traders today will be once again the Bank of England’s minutes. Flip flop or unreliable boyfriend, market participants have called Mr Carney with both names when he took a u turn from his hawkish remarks to dovish tone. Given that we have seen a weakness in the trade activity for the past month and the retail sales data was also on the softer side, the expectations are that he may maintain his somewhat dovish tone.
The recent fall in the PMI is also making the investors nervous about the dovish comments by Mr Carney today. However, if Mr Carney does come up with some hawkish tone, we could see the GBP/USD pair recovering all the losses and flying towards the 1.72 mark.
Disclaimer: The above is for informational purposes only and NOT to be construed as specific trading advice. responsibility for trade decisions is solely with the reader.