Super Thursday

Today, at 12:00 pm GMT the Bank of England (BOE) will publish its monetary policy decision. It’s not just a policy statement either. It’s “Super Thursday”.

“Super Thursday” refers to the quarterly simultaneous release of the BOE monetary policy statement, Monetary Policy Committee (MPC) meeting minutes, and the Inflation Report. Those could all be some of the major catalysts for the pound’s forex moves. The icing on the cake and what makes this Super Thursday super is the BOE Inflation Report, which contains more details on the central bank’s growth and inflation outlook and provides clues on what policymakers are planning next.

Dovish comments could indicate that monetary stimulus might stay in place for much longer while hawkish estimates could suggest that the central bank is gearing up to tighten soon. Pressure is mounting on increasing the rates in May.

The BOE last November raised its interest rates for the first time since 2007, pushing it from 0.25% to 0.50%

More importantly, Governor Mark Carney confirmed speculations of two more rate hikes from the central bank, saying that “We in fact need those two additional rate increases in order to get that return of inflation to target.” The question is how fast BOE will move towards tightening the market.

Investors remained on edge after a big selloff in equities in the past few days on worries about the prospects of rising interest rates around the world, which would shut off the liquidity that has underpinned a cheerful rally in riskier asset.

Monetary and fiscal policymakers try to explain the warnings they receive from the volatile markets of this week. At the same time, their policies are seen very closely by investors to take positions in the market.

New Zealand’s central bank said yesterday that volatility in equity markets this week was a warning sign that global investors are nervous about the risk of higher inflation and rising interest rates.

Combined with an expected economic boost from President Donald Trump’s planned tax cuts, the increased deficit spending could overheat already strong U.S. growth and accelerate inflation to levels not seen over a decade.

Last night, U.S. congressional leaders reached a two-year budget deal to raise government spending by almost $300 billion, it was received by global share markets remained on edge as U.S. bond yields moved towards four-year highs.

Living in the new era of increasing global growth and moving away from globally low interest rates, every central bank meeting has its own suspense to see how they will pave the way for their future path.