After a busy week last week with the ECB and Federal Reserve meetings, and then a hectic weekend at the World Cup, this evening England finally kick off their World Cup campaign. Similarly, this week is also the turn of the Bank of England as they are set to meet on Thursday then release their Monetary Policy Summary. However, the market is not expecting much from the central bank as this isn’t a ‘live’ meeting and no changes or new developments are anticipated, and a 7-2 vote split is anticipated with both Ian McCafferty and Michael Saunders dissenting (let’s hope for more action tonight with England in Volgograd or at least a similar scoreline). Currently the market is pricing in a 50% chance of an interest rate hike in August however this still seems a step too far for Carney and his colleagues and it is unlikely that anymore Brexit certainty will be in place and the Bank may also wish to wait longer for further developments on the UK economy picking back up.
With regards to Brexit and Brexit headlines, this should be the main driving force behind the pound’s performance this week. The EU summit is next week, and this will be light on development and details but heavy on rhetoric and posturing.