Even more data
Wow, this morning we are expecting another instalment of a lot of economic information today. Starting with the Bank of England minutes and also the vote on our interest rate decision. Of course, this is expected to remain unchanged and where, in the past, two members of the nine strong committee had voted to change, now all are unanimous in their view on a continuation of current policy.
Inflation is a big part of this conversation and has declined to 0.3% and on the back of this our expectation of an interest rate increase is for early 2016 now – all things going well. Do we see a risk of stimulative measures stemming from possible deflation? Hmm…maybe not at this stage. Carney seems happy to allow consumer spending expectations from lower prices to feed growth for now.
US Data is due out today focusing on some housing information (new buildings begun) but more important will be the Producer Price Index. Today this could be more important than perhaps it normally might given that producers will pass on changes in costs to consumers. This could put emphasis on inflation/interest rate conversations which leads us nicely to the Federal Reserve minutes today.
I will be enjoying a solid game of Central Bank Bingo and looking closely for the terms that they used last time to see if they have changed their attitudes at all. Terms like ‘hawkish’ or ‘mild but perceptibly hawkish’ were used in past conversations and there are rumblings that the terminology of patience could be concluding and a shift might be in the pipeline towards a less cautious speech.
Could be an opportunity to buy Dollars before the PPI and Speech today.