Macro data released today showed that monthly retail sales in the UK rebounded more than expected for October, suggesting that consumer morale remains upbeat ahead of the upcoming holiday period. Today’s encouraging retail sales data has provided further support to Sterling after yesterday’s mostly hawkish BoE minutes lifted the Pound against its key peers.Today, weak preliminary PMI readings across key European nations showed signs of further economic troubles in the Euro zone. Across the Atlantic, consumer price inflation and Markit manufacturing PMI data scheduled later today will be watched for further clarity on the future policy stance, especially after yesterday’s FOMC minutes did not provide a clear direction on the interest rate trajectory going forward.
Following the latest Quarterly Inflation Report, the minutes of the central bank’s latest policy meeting offered no fresh insight to the central bank’s policy stance. However, two policymakers continued to vote for an immediate rise in Britain’s benchmark interest rate, despite the latest set of economic releases from the UK displaying signs of headwinds for the economy.Across the Atlantic, focus among traders today is likely to remain on the FOMC minutes, particularly after the central bank wound up its stimulus programme last month and indicated that the slack in the nation’s labour market is diminishing. Additionally, investors will look for hints of concern in the minutes about the recent slowdown in the global economy.
While today’s UK data showed that the consumer price inflation remained well below the BoE’s 2% target rate, it was marginally ahead of market expectations. Benign price trends from the UK lately have severely dampened expectations of a rate rise in the UK. Going forward, market participants will eye the minutes of the latest BoE’s policy meeting tomorrow to gauge the central bank’s views on the future course of interest rates.Across the Atlantic, yesterday’s downbeat industrial production offered fresh signs of headwinds for US growth. In the Euro zone, with the German economy escaping a recession in the third quarter, today’s ZEW survey will shed light on economic conditions in Europe’s largest economy during the final quarter of 2014.