Bank of England Governor Andrew Bailey
Yesterday’s session was relatively quiet for the GBP, with no significant data releases. The focus was on central bank commentary, particularly a speech by Bank of England Governor Andrew Bailey at the British Chamber of Commerce Annual Conference. Bailey reiterated that inflationary risks were skewed to the upside, and further tightening in monetary policy would be necessary if there were evidence of more persistent pressures. This reaffirms the view that the BoE may hold rates rather than hike them in upcoming meetings. As a result, the pound had a quiet day, with GBPEUR up 0.25% and GBPUSD up 0.05%. Today, central bank speakers, including Bailey, Ben Broadbent, and Dave Ramsden, will once again dominate UK news, with attention on the path of monetary policy and the impact of weak labor market data on MPC members’ views.
Noticias en la eurozona
In the eurozone (EUR), news is expected to be limited due to a public holiday in many European countries. However, data from France showed a drop in unemployment to 7.1%, in line with expectations. While this may seem positive, policymakers may view it differently as they try to address high and persistent inflation. The ECB has been emphasizing the importance of a strong labor market and wage setting in recent communications, highlighting concerns that high wage settlements could fuel inflationary pressures. ECB Vice President Luis de Guindos may provide further insights on this issue in his speech today, although previous comments have been data-dependent and consistent with the official stance.
US debt ceiling concerns
In the US (USD), concerns about the debt ceiling persisted, despite optimistic tones from officials involved in negotiations. Markets remain skeptical about the possibility of a bipartisan deal being reached and legislated within the next two weeks. As a result, the underlying bullish view on the dollar remains intact. The DXY index traded close to an eight-week high, indicating continued strength. Economic data to watch today includes initial jobless claims, while market participants will also focus on commentary from Fed officials, including Governors Jefferson and Barr, as well as Dallas Fed President Logan.