Data just out indicated that domestic manufacturing activity slowed unexpectedly for September, although it continued to remain in the expansion phase. Against this backdrop, market participants will closely watch this week’s construction and services activity reports to gauge whether the nation was able to sustain the pace of growth during the third quarter.Across the Atlantic, investors will keenly eye today’s ADP employment data to ascertain the pace of recovery in the nation’s labour market ahead of Friday’s official non-farm payrolls report. With increasing threat of deflation in the Euro bloc as evident by yesterday’s weak Euro zone consumer price inflation data, markets will keep a close watch on tomorrow’s outcome of the ECB’s monetary policy meeting for further direction.
The just out revised second quarter GDP report in the UK has confirmed the steady growth trend witnessed in the nation over the past year. However, another report indicated that the nation’s current account deficit widened unexpectedly for the second quarter. Nevertheless, further hints over the pace of growth during the third quarter will be clearer with the release of this week’s domestic PMI reports and is likely to stir volatility in the Pound against the majors.Against the backdrop of encouraging German consumer price inflation and weak employment data, today’s Euro zone inflation and unemployment data will be keenly eyed for further clarity. Any deterioration in inflation would add pressure on the ECB to act swiftly at its policy meeting due this week.
At home, data just released revealed a more than expected drop in the number of mortgage approvals for August. In this context, the Financial Policy Committee’s quarterly policy statement scheduled this week will be keenly eyed, especially considering mixed housing data in the nation. Given the importance of economic data in deciding the future monetary policy stance, this week’s PMI reports and revised GDP data in the UK will attract increased market attention.Across the Atlantic, an upward revision to the US GDP data for the second quarter supported the greenback against the majors in Friday’s trading session. Across Europe, today’s German consumer price inflation reading will be closely watched, as disappointing data might heighten speculation for additional stimulus measures