PM May head due to meet ECB President Tusk at 13:30.
Yesterday evening the US Fed reserve meeting resulted in no change in interest rates, as expected. However, the rate-setting committee sent a dovish message by significantly lowering their expectations for interest rates. They have suggested there will be no hikes this year having previously pointed to two quarter-point increases in 2019! The Fed also committed to ending its balance sheet taper by September, with the process beginning in May.
The central bank focus turns now to the Bank of England. The BoE delivers its latest policy announcement at 12pm today. Interest rates are widely expected to stay at 0.75%, but the accompanying MPC minutes will give an indication of how the Committee’s views have evolved since the February Inflation Report. With no press conference nor any updates to the economic forecasts due, and no changes expected to their assumptions around the nature of the UK’s withdrawal from the EU, many doubt the MPC will show any urgency to hike at this stage.
EU heads of state will head to Brussels for a two-day summit. Brexit is almost certain to be the main talking point, with UK PM May likely to set out the case for the UK to be granted a short extension to Article 50. Speaking yesterday, European Council President Donald Tusk said he believed the EU would agree to a short extension, but this would likely be conditional on the House of Commons backing the Withdrawal Agreement.
PM May is due to meet Donald Tusk around 13:30, rumours and announcements could be on the cards later this afternoon. Brexit updates have caused big movements recently and could easily do the same later this afternoon.
Other Brexit comments today have some from the DUP Lawmaker Sammy Wilson “ No point in us agreeing to something that isn't going to be backed by majority”. Another comment from an EU MEP Guy Verhofstadt, Impossible for Brexit extension to go beyond 23 May.