It was a very quiet start to the week across the board, following last week's volatility. Since a big move last week Sterling Euro has been trading sideways within a range of 1.3805 to 1.3950. Both Sterling and Dollar were at the mercy of the overall demand for the US dollars yesterday, which spiked in Europe as traders priced in an increased possibility of the Fed liftoff following Friday’s upbeat NFP report.
UK industrial and manufacturing output numbers are scheduled for release this morning. Both, are expected to stall in October, but year on year a minor improvement is expected.
Manufacturing accounts for only about 10% of the economy and recently both manufacturing and service sector PMIs have cooled significantly. However, the manufacturing PMI had spiked in October showing an acceleration in output growth and an increase in new orders; the best since June 2014. Hence, there is a possibility of better-than-expected manufacturing production numbers being released today. This afternoon the National Institute of Economic and Social Research releases an estimate of UK growth over the last 3 months up to the report, which is released a month before the official announcement.
On the Euro front, German Industrial Production fell short of expectations at just 0.2% growth month on month. Comments by ECB rate setters since last Thursday’s ECB Rate decision suggest there was not enough support for bolder action on the ECB's governing council. The head of Germany's Bundesbank, Jens Weidmann, said he had voted against easing, Latvia's central bank governor Ilmars Rimsevics, declined to say how he voted, but questioned some of the measures announced. Executive Board member Yves Mersch, on the other hand, stood by Thursday's decision and even left the door open for more stimulus in the future if needed.
Data to watch: 9.30am UK Manufacturing & Industrial Production. 10am Eurozone GDP. 3pm UK NIESR GDP estimate. Also out are scheduled comments from ECB’s Constancio and Makuch.
Posted in Daily Market News on Dec 8 2015