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FXstreet.com (Barcelona) - Derek Halpenny, European Head of Global Markets Research at the Bank of Tokyo Mitsubishi UFJ notes that the key events of the day will come from Europe today with the BOE and ECB monetary policy meetings.

He notes that it is of course Mark Carney’s first monetary policy meeting and hence there will be greater market attention ahead of the BOE announcement. However, Halpenny adds that it is much too early to expect anything from the Carney-MPC, with next month coinciding with the Quarterly Inflation Report the earliest we can expect change. He feels that even then the likeliest change will be a move toward some form of forward guidance. He writes, “Given Gilt yields have surged and given it is Carney’s first meeting, we may get a statement with today’s announcement in an attempt to show MPC continuity under new leadership.”

Looking to Europe, Halpenny notes that the ECB press conference after its meeting might be more interesting. He see that yields have been rising in the euro-zone too and the periphery bond markets are more unsettled which may require more forceful rhetoric from President Draghi on the outlook for policy in order to re-anchor short-term rates. He writes, “The euro could be set for a new leg lower if Draghi successfully tempers rising yields.”
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