MORNING BID-Britain's anticlimatic super Thursday

Europe

A look at the day ahead from Julien Ponthus

As Britons make their way to polling stations for local elections, the focus is on Scotland where an outright majority for the pro-independence Scottish National Party could trigger a showdown with Boris Johnson’s government, and hit the pound.

There’s a couple of things, however, which explain investors’ relatively low anxiety levels: results due on the weekend could show the SNP lost momentum, opinion polls have indicated. And whatever the result, Downing Street is determined not to permit an independence referendum.

A more pressing matter may be the Bank of England’s policy meeting where there is a chance it could talk of trimming support for the recovering economy. It is also likely to say Britain’s economy is heading for a much stronger recovery this year than it previously expected.

Any more hawkish than that and we are likely to see a market impact.

As shown by the FTSE 100 index reclaiming the 7,000-point bar on Wednesday and making its biggest jump since February, sentiment is quite upbeat.

Also, with the Bank of Japan stressing the need for low interest rates and U.S. Treasury Secretary Janet Yellen walking back her comments on the possible need for rate hikes, the doves clearly have the upper hand.

Norway’s central bank may shed light on its intention to tighten policy in the second 2021 half but will leave interest rates unchanged today.

In the meantime, stock markets are at or close to record levels; the Dow Jones hit a peak on Wednesday and the pan-European STOXX 600 stands 0.4% off a new milestone, galvanized by stellar ongoing Q1 earnings.

Other key developments that should provide more direction to markets on Thursday

– German manufacturing March

– Euro zone retail sales

– Rebound in trading boosts SocGen earnings

– UniCredit Q1 profit tops forecasts

– ECB: today’s speakers include Vice President Luis de Guindos and ECB Board member Isabel Schnabel

– Fed: New York Fed President John Williams and Dallas Fed President Robert Kaplan

-U.S. initial jobless

-U.S. earnings: Kellog, Expedia, NewsCorp, AIG

(Reporting by Julien Ponthus; editing by Sujata Rao)