EUROPEAN SESSION

In the European session, we have the BoE rate decision. The central bank is expected to keep the Bank Rate unchanged at 3.75% with a 6-3 vote split, while keeping a tigthening bias. The BoE has enough reasons to stay put for now, following a soft UK employment report and benign inflation data. The market is pricing in 42 bps of tightening by year-end and a total of 102 bps by the end of 2027 (four rate hikes).

AMERICAN SESSION

In the American session, we get the latest US Jobless Claims figures. Initial Claims are expected at 206K vs 206K prior, while Continuing Claims are seen at 1779K vs 1774K prior. We will likely need a significant spike to the upside in initial claims to trigger a market reaction, as the labour market data has been stable for several months.

I’d be more on the lookout for signs of de-escalation in the Middle East now that the Fed was forced to hike interest rates. Rate hikes, $100 oil and elevated bond yields might put more pressure on Trump.

CENTRAL BANK SPEAKERS

• 10:00 GMT/06:00 ET – ECB’s Rehn (neutral – voter)

This article was written by Giuseppe Dellamotta at investinglive.com.