BoE meeting will be event of the day
The minutes of the April MPC meeting showed the voting pattern unchanged at 6-3 to keep quantitative easing unchanged. The same three members, including the governor, were out-voted on their call for an additional £25bn of gilt purchases. With Q1 GDP showing a return to growth and the PMI surveys pointing to improving conditions, there is unlikely to be any reason to change policy later today, especially this close to the new governor Carney taking over. Carney is expected to assume the position on July 1, 2013 for what is officially an eight-year term, though he has already indicated that he will step down after five.
Following the better than expected German industrial orders, industrial production also exceeded expectations rising for a second consecutive month in March. These recent releases suggest German manufacturing, which accounts for around 20% of the economy, is gaining momentum. On the back of this the Euro recorded gains as the data made further ECB rates cuts less imminent (making EUR more attractive).