GBP could reach peak
Markets were well supported yesterday. In the US, July international trade was somewhat weaker than expected, but the report cut only 0.1% off market expectations on Q3 GDP, which now stands at 2.6% . The report on trade was offset by a better-than-expected report on August auto sales and a generally reassuring Beige Book report on economic conditions .
The final report on Q2 GDP growth in the eurozone was unrevised from the 0.3% estimate, and an increase in the euro area PMI for August was consistent with market expectations that the modest rate of economic recovery will persist through year-end . The UK services PMI surprised to the upside, with new orders rising at their fastest pace since 1997 .
Potential military action in Syria remains a market focus, as the US Senate Committee on Foreign Relations voted to authorize President Obama to conduct a limited military operation there.
Today we have two central bank meetings:
Bank of England (BoE) interest rate decision – at 12 midday – no changes expected and there is unlikely to be a post decision press conference.
European Central Bank (ECB) – at 12:45 today – a shift in the European Central Bank’s (ECB) forward-guidance and change in the prospects for additional monetary support may spark a selloff in the EUR.