Market movers today
The week starts out on a fairly quiet note with regards to economic releases. Instead markets will be looking for new signals from Brussels with regard to the extension of the triggering of Article 50 in relation to Brexit.
Later in the week, central banks will dominate the agenda with the BOE, Fed and Norges Bank concluding their policy meetings.
On Wednesday, the Fed is on hold while lowering the ‘dot’ signal for 2019 to one hike (from two), and hence we think the most interesting meeting will be the Norges Bank meeting on Thursday, where we expect a rise in its policy rate by 25bp to 1.00% and to signal one further rate hike this year.
Selected market news
The Asian equity markets have been grinding higher this morning, while bond yields have remained range-bound as the market are looking for support from the Federal Reserve meeting on Wednesday. Here, the Federal Reserve is likely to revise its forecast for rate hikes down to one rather than two. This will continue to suppress volatility in the markets and support a flat yield curve going forward.
In the UK, PM May has been trying to get more support from the Eurosceptics in her party for her deal, which is expected to be put to a vote on Tuesday. However, if she does not have strong chance of getting the deal accepted, then she is not likely to put it to a third vote according to media reports quoting ministers in her government. Otherwise, PM May will go the EU summit on Thursday to seek an extension on the Brexit process. Hence, there will be plenty of uncertainty regarding the Brexit process during the week. GBP has remained fairly range-bound versus both the USD and EUR this morning.
