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UK Inflation Report To Drive Markets

UK Inflation Report To Drive Markets

After yesterday’s quiet day on the markets where there was little data released and US trading was thin due to Veterans Day, today we see a return to action and it is the UK that is taking centre stage.

It is a big day for the Pound as UK labour market figures are released, swiftly followed by the important Quarterly Inflation Report from the Bank of England. For those of you hoping to see some Sterling strength, today may not be a good day as even though unemployment is expected to continue to fall it is not expected to do so at such a rate as to strengthen GBP. The inflation figures then take centre stage and with a lowering of inflation and growth forecasts expected; this doesn’t bode well. The knock on effect of this is that Mark Carney and the Bank of England can stay in “let’s see what happens mode” before raising interest rates. Added to stagnant earnings data, people will look into the Carney’s comments in his press conference for clues. If, as expected, Carney hints that rates aren’t going anywhere until mid 2015 at the very earliest then Sterling is likely to weaken.

Other news dominating the FX world today is the announcement that 5 Banks from Switzerland, the UK and the US have been fined a total of around $3.3bn for rigging foreign exchange rates. UBS, Citigroup, JP Morgan, HSBC and RBS have all been ordered to pay fines for their activities between January 2008 – October 2013 when they “put their interests ahead of those of their clients, other market participants and the wider UK financial system.”

Other than the news out of the UK, we have industrial production out of the Eurozone, wholesale inventories from the USA and Business PMI from New Zealand.

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