Five Things You Need to Know to Start Your Day
Want to receive this post in your inbox every morning? Sign up here
It's Super Thursday at the Bank of England, the EU raises its GDP forecast, and Canadian bank woes increase. Here are some of the things people in markets are talking about today.
At 7:00 a.m. Eastern Time the Bank of England will publish it latest monetary policy decision and update its inflation forecast. The announcement will be followed by a press conference with Governor Mark Carney. While no economist surveyed by Bloomberg expects a change in rates today, there is disagreement among investors on the inflation outlook, with Mike Riddell, a U.K. fixed-income portfolio manager at Allianz Global Investors, saying the bank could surprise markets by lowering its forecasst.
The European Commission said that growth in the euro area will be stronger than previously forecast, adding that some risks to the outlook have eased. The EU also raised its growth forecast for the United Kingdom, but warned of the fallout from Brexit uncertainty and faster inflation. Figures published in the U.K. this morning showing the deficit in goods and services jumped to 10.5 billion pounds ($14 billion) in the first three months of the year, suggest that trade contributed to the country's sharp slowdown in the first quarter of the year.
Six of Canada's largest banks had their credit ratings downgraded by Moody's Investors Service as concerns over the housing market and consumer indebtedness have left lenders vulnerable. The troubles at Home Capital Group Inc. have increased investor focus on the housing market north of the border, with the S&P/TSX Bank Composite Index down more than 7.5 percent from its March peak.
Markets still quiet
Overnight the MSCI Asia Pacific Index rose 0.3 percent, while Japan's Topix index added 0.1 percent. In Europe, the Stoxx 600 Index was 0.2 percent lower at 5:55 a.m., with positive results from UniCredit SpA failing to lift the wider market. S&P 500 futures slipped 0.1 percent.
Reaction to the shock firing of FBI director James Comey continues on Thursday, with analysts viewing the drama as an unwelcome distraction from the implementation of the president's agenda. The investigation into Michael Flynn's connections to Russia took an unusual turn yesterday when the Senate Intelligence Committee issued a subpoena for documents relating to their probe. There have been calls for Congress to do more to hold the president accountable in the wake of recent events.
What we've been reading
This is what's caught our eye over the last 24 hours.
- Fed's Rosengren favors three more 2017 hikes to foil overheating.
- Bond market volatility plunges to lowest since August 2014...
- ... And if you're looking for volatility, try the commodity where producers are attempting to control prices.
- This is what can kill the emerging market rally.
- Student loans just got more expensive.
- Mobius says low market volatility is tied to social media.
- "The Belt connects the land, the Road moves on the sea."