A Mixed Forecast
After yesterday’s German PMI data was better than expected, the markets eyes turned towards today’s data-filled economic calendar and, in particular, the German IFO data release.
These figures have already been released this morning and the median forecast of 110.5 was better than expected, as was the expectations index. However, the current conditions index was weaker than forecast and seems to have consolidated the gains the Euro made against GBP yesterday.
The Pound has been stumbling a little bit against the Dollar in the last 24 hours but this could well be due to profit taking and there is still the possibility of going higher especially due to the optimism coming out of the MPC minutes.
We are also going to hear Mario Draghi speak later today. No doubt he will hint at some sort of ECB intervention, although as always will probably not give any huge clues as to what that may be but will drop in the key phrase of “unconventional measures”.
The focus on the US is on the US Durable Goods Orders report out later today. Before this, focus has been on the US housing recovery which looks like it could well be running out of steam. Sales dropped an alarming 14.5% as record house prices and higher mortgage rates are making properties less affordable.
In the UK, there are rumours that new guidelines will make it more difficult to get a mortgage here, as lenders look to go through applicants’ accounts with a fine toothcomb, while outgoings such as high mobile phone bills and expensive gym memberships will be looked at unfavourably.