The just out BBA data revealed an unexpected drop in the number of mortgage approvals while the UK public sector borrowed more than expected for August. The Pound witnessed some pressure before these releases, but has surprisingly arrested further decline against the majors. With little on the domestic economic calendar this week, investors will keep a close watch on this week’s speech from the BoE Governor, Mark Carney, for further cues on the future policy outlook.The latest PMI readings across major European economies has offered some support to the Euro this morning. Across the Atlantic, investors will keep a close watch on today’s Markit manufacturing activity report along with speeches from few US Fed officials for further direction.
In the aftermath of Scotland voting to stay as a part of the UK, all three major rating agencies, S&P, Fitch and Moody’s, sounded optimistic about their credit ratings on the nation. Though the rejection of independence has preserved the country’s current institutional and fiscal framework, sterling has slipped since its highs on Friday morning, especially against the US Dollar.With looming deflationary pressure in the Euro zone along with last week’s disappointing results from the TLTRO operations, market attention has now shifted to the ECB President, Mario Draghi’s speech scheduled later today for further cues on the policy outlook. Against the backdrop of persistent weakness in the US housing market, today’s existing home sales data will be keenly eyed.
The results of the first round of the Targeted Long Term Refinancing Options (TLTRO) Programme released yesterday indicated that banks borrowed just €82.6 billion at the auction, less than market expectations. This stoked speculation that the ECB might implement additional stimulus measures to shore up the ailing economy. However, the common currency showed little reaction to the results.This morning, the Euro-Sterling pair is trading under pressure as the outcome of the Scottish referendum revealed that majority of the voters supported Scotland to remain in the UK. Additionally, data released earlier today showed that German producer prices continued to decline for August, thereby heightening concerns that a deflationary threat is firming up in the Euro zone. Going ahead, market participants will keep a tab on next week’s speech from the ECB Chief, Mario Draghi, for hints about the prospects of further easing measures in the economy. Additionally, the preliminary manufacturing PMI readings for September across key European nations will be eyed to gauge economic conditions for the third quarter.