25/10/16 - Curtains for Carney?

GBP

At a time of great uncertainty about the UK’s future relationship with the EU, Mark Carney has been viewed as a source of stability despite political criticism. However, as he has given himself a deadline of the end of 2016 to decide how long he will stay at the BOE, this stability could be shaken. Canadian-born Carney will decide by the end of the year whether he will serve a full eight-year term through until 2021, or whether he will leave in mid-2018, as originally planned when he joined the UK central bank in 2013. Should Theresa May trigger Brexit as planned in March 2017, negotiations could be winding down by mid-2018, and markets have become concerned about the possibility of Carney leaving around that time.

USD

The U.S. dollar traded close to a nine-month high against a basket of major currencies yesterday on growing expectations of a Federal Reserve rate hike in December. Recent comments from central bank officials have bolstered those expectations, with San Francisco Fed President John Williams on Friday redoubling his call for raising rates soon, and New York Fed President William Dudley saying last week that a rate hike was likely before the end of this year.
 
Next week, four major central banks are due to take their monetary policy decisions– the Federal Reserve, Bank of England, Bank of Japan and Reserve Bank of Australia. While the Fed will be widely expected to hold off next month, less than a week before the America heads to the polls, the announcement and statement that follows will be closely watched.

 

Key Announcements

09.00 – EUR : German Ifo Business Climate; forecast at 109.6 from a previous of 109.5
 
15:35 – GBP : BOE Governor Carney speaks
 
16:30 – EUR : ECB President Draghi Speaks