The Bank of England is not expected to move interest rates today. But markets price an almost 50-50 chance of a cut in June, so the focus is on whether policymakers deliver any groundwork for loosening policy in six weeks' time.
A cut is fully priced for August and last week sterling short positions rose to their largest since January 2023, so the currency may be liable to fall if post-meeting guidance doesn't match up to the market's expectations.Britain's FTSE 100 made a record high on Wednesday, partly underpinned by hopes of imminent rate cuts.
Bank of Japan minutes showed a hawkish shift in April, and some members eyed the prospect of faster-than-expected rate hikes should inflation start to seem durable. On the Middle East, U.S. President Joe Biden for the first time publicly vowed to withhold weapons from Israel if its forces make a major invasion of Rafah in southern Gaza.