Today, all eyes will be on the Bank of England (BoE) Governor Mark Carney’s testimony about the latest quarterly inflation report in front of the Treasury Select Committee. The report which was delivered earlier this month had surprised markets by its dovish nature. Today’s tone of the BoE Chief will be crucial to Sterling investors who have been caught between the diverging Fed and ECB monetary policy outlook.Earlier today, the Euro received fresh impetus against its key peers from stronger than expected German Ifo surveys and in line German Q3 final GDP data. Across the Atlantic, the Federal Reserve (Fed) Chairwoman Janet Yellen yesterday responding to a letter received from savers called for a gradual increase in interest rates. On the data front, the revised third quarter growth figures slated later in the day will be on the radar.
In Europe, the week has commenced with the first available information on economic trends in November after data released earlier in the day boosted optimism about the health of the Euro area’s economy. Business activity in the Euro zone expanded at the fastest pace since mid-2011 in November helped by the service sector, indicating a pickup in growth in the final quarter. However, the French services sector displayed weakness due to the recent Paris attacks. Moving ahead, investors will eye the release of US manufacturing PMI and existing home sales report due later in the day. Meanwhile, it is a light economic calendar day in the UK today.Going forward, spotlight will shift towards third quarter GDP data in the UK and the US scheduled this week.
As the week comes to an end, investors’ are focused on any fresh cues that could further clarify that the European Central Bank (ECB) will implement additional stimulus measures and the Federal Reserve (Fed) would raise its rates for the first time since June 2006 next month. Earlier today, the Euro erased its gains against the majors after the ECB Chief hinted strongly at a rate cut and changes to its QE programme in December. Later in the day, some of the Fed officials are due to deliver their speeches.On the macro front, the just out official figures indicated that Britain’s public sector borrowing declined less than forecast for a second consecutive month in October.