Political developments dominated as Prime Minister May requested an Article 50 extension to June 30th.
The Federal Reserve held interest rates at 2.25-2.50%, but there was a downgrading of the outlook and, importantly, median FOMC rate projections shifted to expect no increase in interest rates this year.
The dollar fell sharply on the dovish statement, especially with balance-sheet reduction now set to end in September and EUR/USD advanced to 7-week highs.
Oil prices moved sharply higher to fresh 4-month highs after a substantial EIA inventory draw as dollar losses also provided net support while commodity currencies made net gains.
Sterling registered sharp net losses on Brexit uncertainty and the political atmosphere turned even more toxic following Prime Minister May’s attack on parliament. Precious metals were boosted by dollar losses and secured sharp net gains.
Equities were able to make only tentative gains on growth and trade doubts while US yields dipped to 14-month lows.
UK consumer inflation increased to 1.9% from 1.8% previously and fractionally above consensus forecasts. The core rate, however, was slightly below market expectations at 1.8% from 1.9%. There was little impact on interest rate futures with Sterling little changed while the latest CBI industrial survey reported the weakest growth rate since May 2018.
Political developments dominated as Prime Minister May requested an Article 50 extension to June 30th. EU Council President Tusk stated that any short extension would be conditional on the Withdrawal Agreement being passed in parliament. Sterling dipped sharply with GBP/USD lows just below 1.3150 as GBP/EUR fell below 1.1550 from a peak near 1.1800 seen last week.
There was a GBP/USD recovery to above 1.3200, although this reflected dollar weakness as GBP/EUR fell sharply. Ahead of Thursday’s EU Summit, Prime Minister May strongly attacked parliament, further inflaming domestic tensions and making it even more difficult to secure House of Commons agreement which increased fears over a disruptive EU exit. Sterling remained on the defensive on Thursday ahead of the Bank of England policy decision, but GBP/USD held above 1.3200 on US losses.
|08:30||SNB Monetary Policy Assessment (Q/Q)||-||-|
|08:30||CHF SNB Interest Rate Decision||-0.75%||-0.75%|
|09:00||SNB press conference||-||-|
|09:00||ECB Economic Bulletin||-||-|
|09:30||GBP Retail Sales ex-Fuel (Y/Y)(FEB)||3.00%||4.10%|
|09:30||GBP Retail Sales ex-Fuel (M/M)(FEB)||-0.50%||1.20%|
|09:30||GBP Retail Sales (Y/Y)(FEB)||3.40%||4.20%|
|09:30||GBP Retail Sales (M/M)(FEB)||-0.40%||1.00%|
|12:00||BOE MPC Vote Unchanged(MAR)||9||9|
|12:00||BOE MPC Vote Hike(MAR)||-||0|
|12:00||BOE MPC Vote Cut(MAR 01)||-||0|
|12:00||BoE QE Purchase Target(M/M)(MAR)||435B||435B|
|12:00||BoE Rate Decision(M/M)(MAR)||0.75%||0.75%|
|12:30||USD Current Account Balance||-124.3B||-124.8B|
|12:30||USD Philadelphia Fed. Manufacturing Index(MAR)||3.2||-4.1|
|12:30||CAD Wholesale Sales (M/M)(JAN)||-0.10%||0.30%|
|12:30||USD Continuing Jobless Claims(FEB 23||1.772K||1.776K|
|12:30||USD Initial Jobless Claims(FEB 23)||226K||229K|
|23:30||JPY National CPI Ex-Fresh Food (Y/Y)(FEB)||0.80%||0.80%|
|23:30||JPY National CPI (Y/Y)(FEB)||-||0.20%|