| Time | Country | Event | Period | Previous value | Forecast | Actual |
|---|
| 04:30 | Australia | Announcement of the RBA decision on the discount rate | | 4.35% | 4.35% | 4.35% |
| 06:00 | Germany | Factory Orders s.a. (MoM) | March | -0.8% | -0.1% | -0.4% |
| 06:00 | Germany | Trade Balance (s.a.), bln | March | 21.4 | 22.4 | 22.3 |
| 08:30 | United Kingdom | PMI Construction | April | 50.2 | 50.4 | 53.0 |
| 09:00 | Eurozone | Retail Sales (MoM) | March | -0.3% | 0.6% | 0.8% |
The pound declined moderately against major currencies in the European session on Tuesday, as market participants revised their forecast for a rate cut by the Central Bank. Traders price in 53 basis points of easing this year, implying at least two 0.25% cuts, having previously fully priced only one after the latest inflation data showed prices slowed by less than expected in March.
The pound was supported by the S&P Global/ CIPS report, which showed that activity in the construction sector improved sharply in April, exceeding economists' forecasts, and reaching the highest level since February 2023 amid an ongoing recovery in order books. Demand was boosted by greater confidence regarding the broader UK economic outlook. UK construction PMI rose to 53.0 points from 50.2 points in March. Economists had expected an increase to 50.4 points. An index value above 50 points indicates an expansion of activity in the sector.
Investors are also preparing for the meeting of the Bank of England, the results of which will be announced on Thursday. The consensus forecast is that the Central Bank will again keep its rate at 5.25%. However, the statement and updated economic forecasts will be carefully studied in search of any indication of when policy easing may begin. Recently, some key politicians have made dovish comments: Governor Bailey said that the dynamics of inflation in Europe is different from the American one, and Deputy Governor Ramsden noted that there are risks of lowering the Bank of England's inflation forecast. However, these comments contradict the latest data, according to which consumer price inflation unexpectedly increased in March, and wage and GDP growth in February was more stable than expected. Despite the "dovish" attitude of some politicians, experts believe that the Bank of England has not yet decided to send a clear signal about policy easing. In its last statement in March, the Bank of England indicated that it would “monitor how long the rate should remain at the current level.” Unless there is a shift from this forecast to a clear signal of policy easing, it is likely that Bank of England policymakers will continue to lean towards the initial cut rates at the August meeting rather than the earlier June move.