Build up to central bank meetings continues

6 March, 2013

Tom Arnold

This week the markets are having a very jittery time ahead of the main news, due tomorrow lunchtime, when both the Bank of England and the ECB make their monthly policy statements.

There has been talk of further Quantitative Easing from the Bank of England, with some members voting for it at last month’s meeting and also the deputy governor has suggested it might be possible for interest rates, already at historic lows, to be cut even further. Fears of these possible actions has caused the Pound to remain under pressure, despite Eurozone issues remaining at the fore as well.

The big problems in Europe are twofold at present – will the Italians manage to form some kind of coalition government following their recent “stalemate” general election, and will European GDP show any signs of recovery or are they still in deep recession?

There have been some rumours of positive meetings between two of the Italian political leaders – Bersani and Grillo, so this situation might be heading towards a positive conclusion, but with GDP expectations are for continued negative numbers, possibly actually worse than previous – figures due at 10am this morning. So we shall see how this pans out, and of course what the ECB has to say on both subjects tomorrow lunchtime.

All in all it is definitely worth staying in close touch with your CI account manager if you have an imminent currency requirement, as the next couple of days could be crucial.