Forex Institutional Research: RBS Carney to Testify on EU Referendum
Key quotes from the report:
Bank of England Governor Carney has, for the most part, declined to give a strong opinion in either direction on the economic impact of the upcoming EU membership referendum. But at his testimony tomorrow before the Treasury Select Committee on Economic and financial costs and benefits of UK’s EU membership, the Governor may lay out a more concrete view on the Bank’s assessment of the risks, though the Governor may stress that he and the institution are not attempting to take sides or influence the debate. My colleagues in currencies research noted in their weekly themes note from Friday that the GBP may continue to be subject to periodic fluctuations as “noise levels” around the referendum rise and fall, and the testimony tomorrow may pull “Brexit” risks front and center again. In his QIR press conference in late-February, Governor Carney stressed that the BoE is engaged in contingency planning but gave few details on the Bank’s view on potential economic impacts of an exit vote.
Aside from Governor Carney’s testimony, the data calendar is somewhat quiet. In the Euro-zone, fourth quarter GDP growth is revised and January industrial production in Germany is expected to bounce back after contracting outright in the final two months of 2015. But with the ECB decision looming large on Thursday, the data releases may have little obvious impact on the EUR. February housing starts in Canada are released and may have a similarly modest currency impact as markets watch the ongoing bounce in oil prices and await the latest guidance from the Bank of Canada on Wednesday. Swiss CPI for January is likely to show Switzerland remains in deflation. Finally, in the US four more states hold primary contests for at least one of the two major parties. For both the Democrats and Republicans, Michigan is the largest contest tomorrow in terms of total delegates up for grabs – results are expected throughout the US evening tomorrow as the polls close.
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