Forcasted Central Bank Rate Decision

Date / GMT				ACM		Consensus		Current Rate
6th/11:00		European Central Bank Rate Decision		1.00%		1.00%		1.00%
		A wide majority of the market expects the ECB to remain at the current level of 1.00%, but a growing consensus is beginning to suspect the central bank may forced to cut rates 25bps. Commentary released by IMF highlight critical economic challenges for the Eurozone region. In the executive summary of IMF publication released last week, they make a cautionary statement: “while the Eurozone facing strong disinflationary pressures, monetary policy will need to remain supportive…the benefits of further cuts in the policy rate need to be weighed against their possible adverse impact on the functioning of money markets but any potential margin for further reductions out to be utilized as soon as possible.” ECB President Trichet has been reluctant to establish a hard floor of 1.00% as of recent, which is probably due to the appreciation in the Euro hindering export driven growth. The sharp decline of GDP to -2.5 reflects the severity of economic conditions in the Eurozone. In addition to the growth compenent, the interest rate market remains far too delicate to absorb any rate hikes in the near-term as yields begin to pose some degree of relative value for investors looking to migrate out of risk-averse positions.
6th/11:00		Bank of England Rate Decision		0.50%		0.50%		0.50%
		The BoE is expected to hold rates steady at 0.50% which is line with market forecasts. It is most likely the central bank will adopt a "wait and see" approach following the aggressive measures taken in the form of asset purchases over the last several months. A key indicator suggesting that any additional quantitative easing would occur on a much more conservative scale is the 150bln Sterling quota for gilt purchases which has not been met. Fulfilling the quota for gilt purchases will probably happen before any additional monetary policy action will be announced and this is supportive of the Gbp. The UK economy remains under pressure with rising unemployment at 7.6% vs. 7.4% estimated. Other leading indicators such as a negative GDP of -0.8% and industrial production at -11.9% pose significant challenges for UK policymakers and the deployment of further quantitative easing may prove detrimental to the long-term outlook in region. Source: Ac Markets