Today’s data has shown an improvement in Britain’s retail sales for November. This has strengthened market speculation that domestic spending is improving, especially after yesterday’s labour market report showed that wage growth grew at a stronger than expected pace. Against this backdrop, traders will eye tomorrow’s GfK survey to better understand consumer morale in the UK for the fourth quarter.Across the Atlantic, the US Dollar moved sharply higher yesterday after the Fed dropped the “considerable time” language from its policy statement and provided an encouraging assessment of the economy. Traders will now eye economic data in the US going forward to verify if the Fed remains on its path to raise the key interest rate next year.
Data just released indicated that the unemployment rate in the nation remained at 6% and domestic wage earnings improved more than expected for the three months ended October. Meanwhile, the minutes of the BoE’s latest policy meeting indicated that policymakers remained divided over the central bank’s current stance. However, Sterling showed little reaction to today’s domestic macro updates as investors remained focused on the outcome of the US Fed’s policy meeting scheduled later today. Although the central bank is expected to keep its stance unchanged, traders will eye the post-meeting policy statement for further direction.Across Europe, today’s first round of Presidential elections in Greece will keep Euro investors on their toes.
The just released inflation report has shown that annual consumer prices in the UK grew at a slower than expected pace for November. However, encouraging producer price inflation data has overshadowed a weak consumer prices report, leading the Pound to nudge higher against the majors this morning. Meanwhile, risks emanating from the Euro zone’s weak macro health, as highlighted in today’s BoE financial stability report, has limited the upside in the Pound.Across Europe, data released earlier today showed a more than expected improvement in Euro zone manufacturing activity for December. Going forward today, the flash Markit manufacturing PMI reading in the US will provide an early insight into the nation’s manufacturing sector performance, especially after yesterday’s upside surprise in industrial production data.