American FX Outlook: The Bank of England and trade war verbal ping-pong headline

What you need to know before markets open

• China’s commerce ministry accused the US of being “capricious” over bilateral trade issues and warned that the move is actually against the interests of US workers and farmers.
• OPEC leaders struggle to find a common ground justifying the increase in output quotas from July to meet rising global demand, with Iran still signaling it would support only a modest increase in supply.
• Italian politics once again hit the Euro after theEuro skeptic Bagnai was named the head of Senate Finance Committee in Italy. 
• The Bank of England is set to keep the Bank rate unchanged with the wording of the accompanying statement remaining little changed on the dovish side.
• There is no press conference following the Bank of England June meeting, but Governor Mark Carney is set to deliver Mansion-house dinner speech later on Thursday.

Wednesday's upcoming market moving events

• The Bank of England is expected to leave the Bank rate unchanged at 0.50% with statement remaining dovish. For more details read my Preview here.
• The US weekly jobless claims are expected to reach 220K.
• Canada’s ADP employment report is expected to see 20K new jobs added in June.
• The Bank of England Governor Mark Carney is set to deliver a Mansion-house dinner speech at 20:15 GMT.

Major market themes

• The Euro fell to the lowest level in 11-months as the Italian eurosceptic Bagnai was named the head of Senate Finance Committee.
• The GBP tested 1.3100 briefly after the net public sector borrowing fell to £5 billion in May, down £2 billion from a year earlier, but the key risk factor remains the Bank of England monetary policy decision. 

Earlier in Asia/Europe

• The New Zealand Q1 GDP rose 0.5% Q/Q while decelerating to 2.7% y/y.
• Swiss National Bank kept rates steady at 0.75% in June in line with expectations.
• The UK net public sector borrowing fell to £5 billion in May, down £2 billion from a year earlier, official figures show. The fall was bigger than expected and brings borrowing for the financial year to date to £11.8bn, £4.1bn less than in the same period in 2017.