It was revealed today that retail sales in the UK grew more than expected for December. However, attention among investors is likely to remain focused on the BoE Chief’s speech today. Considering the dovish tone in the minutes of the most recent policy meeting and with new stimulus measures introduced in the Euro zone yesterday, his speech will be scrutinised to gauge the future course of monetary policy in the UK.The preliminary PMI reports released earlier today showed that the pace of manufacturing and services activity in the Euro zone improved for January. Across the Atlantic, investors eye the Markit flash manufacturing PMI readings later today to gauge the resilience of the economy to the current subdued global conditions.
Today’s UK data revealed that public sector borrowing in the nation widened unexpectedly for December. However, Sterling has shown little reaction to today’s data as investor sentiment remained subdued after a dovish tone in the minutes of the latest BoE policy meeting released yesterday weighed on expectations of any near term interest rate rise in the UK. Meanwhile, the ECB is scheduled to hold its policy meeting later today, where the central bank is expected to unleash a quantitative easing programme in the Euro zone, the size and duration of which is keenly awaited.Across the Atlantic, today’s weekly jobless claims survey will be eyed to gauge the nation’s labour market health.
The latest BoE policy meeting revealed that policymakers were unanimous in maintaining interest rates in the UK. Sterling lost ground against the majors following the release of today’s minutes, as investors overlooked the upbeat UK labour market report which showed that unemployment rate in the nation fell below 6% and growth in domestic income outpaced Britain’s inflation rate. With the ECB’s policy meeting scheduled tomorrow, the Pound-Euro pair could see a rebound amid expectations that the central bank might unleash an outright bond purchase programme in the Euro zone.Across the Atlantic, market participants will eye today’s housing starts and building permits data to gain an insight into the health of the nation’s housing market.