Events that marked the week:
Focus of the Tuesday's session was on BoE Inflation Report Hearings. Bank of England Governor Mark Carney said on Tuesday that the U.K.’s central bank does plan on following the purdah period in the run-up to the June 23 referendum on the Britain’s membership in the European Union, but noted that Brexit risks could form a part of the Monetary Policy Committee decision scheduled for June 16 and thus could form part of the minutes. Testifying before the U.K.’s Treasury Select Committee Hearing on the May Inflation Report, Carney admitted that the June 16 decision could force the BoE to break the so-called purdah period that prohibits British civil servants from commenting on the upcoming referendum and will begin from Friday.
However, he noted that the BoE had already highlighted the risks associated with the uncertainty surrounding the possibility of a Brexit, as a vote to leave the EU is known, and that, in his personal view, he didn’t expect there to be any new details regarding the issue in the June 16 decision. Carney also reiterated that,
due to the amount of uncertainty in the economy at the moment, the BoE could be either over- or under-estimating its current effect.
From the UK, on Thursday, Second Estimate GDP data was released. UK GDP in volume terms was estimated to have increased by 0.4% between Quarter 4 (Oct to Dec) 2015 and Quarter 1 (Jan to Mar) 2016, unrevised from the preliminary estimate of GDP published on 27 April 2016, in line with market forecasts. This is the 13th consecutive quarter of positive growth since Quarter 1 2013. Between Quarter 1 2015 and Quarter 1 2016, GDP in volume terms increased by 2.0%, revised down 0.1 percentage points from the previously published estimate.
This week markets will be looking at:
Manufacturing PMI (Wednesday 10:30)
Construction PMI (Thursday 10:30)
Services PMI (Friday 10:30)
