The just released GDP figures show that the UK economy recovered strongly in the second quarter, with the services sector, that makes up around two thirds of nation’s output, continuing to be the main driver of growth. The upbeat GDP print, which was in line with expectations, now shifts focus to cues from the central bank on the pace of tightening in monetary policy.Across the Atlantic, the US Fed will begin its two day monetary policy meeting today, ahead of its interest rate decision and statement tomorrow. Amid rising expectations that the US central bank could begin raising interest rate as early as September, investors will closely monitor the FOMC meeting. Apart from the FOMC, house price indices and flash Markit services PMI will attract some market attention.
Amid a light domestic calendar day, market participants look forward to a gauge of industrial orders in the UK scheduled later today for early cues about the health of Britain’s manufacturing sector. Tomorrow, the spotlight will be on UK’s second quarter preliminary growth numbers. Markets anticipate strong economic recovery in the previous quarter, considering the hawkish sentiment shift in minutes of the last monetary policy meeting and the recent positive trend in economic data.In Europe, the Ifo business climate and expectations index came in higher than market expectations for July, boosting optimism about the health of the Euro zone’s largest economy. Across the Atlantic, key durable goods data is scheduled later today.
The just released data showed that the number of approvals for new mortgages rose higher than market consensus for June, indicating strong demand for properties in Britain’s housing market. The figures indicate that the rise in home loan approvals is consistent with the trend seen since the start of the year. In the upcoming week, market focus will shift towards the much anticipated preliminary second quarter UK GDP reading.In Europe, a flurry of flash PMI readings showed that growth in the manufacturing sector of the Euro zone and its two largest economies slowed as concerns surrounding the Greek debt crisis weighed on business confidence. Across the Atlantic, Markit manufacturing PMI and new home sales data are slated for release later today.