The just out revised second quarter GDP report in the UK has confirmed the steady growth trend witnessed in the nation over the past year. However, another report indicated that the nation’s current account deficit widened unexpectedly for the second quarter. Nevertheless, further hints over the pace of growth during the third quarter will be clearer with the release of this week’s domestic PMI reports and is likely to stir volatility in the Pound against the majors.Against the backdrop of encouraging German consumer price inflation and weak employment data, today’s Euro zone inflation and unemployment data will be keenly eyed for further clarity. Any deterioration in inflation would add pressure on the ECB to act swiftly at its policy meeting due this week.
At home, data just released revealed a more than expected drop in the number of mortgage approvals for August. In this context, the Financial Policy Committee’s quarterly policy statement scheduled this week will be keenly eyed, especially considering mixed housing data in the nation. Given the importance of economic data in deciding the future monetary policy stance, this week’s PMI reports and revised GDP data in the UK will attract increased market attention.Across the Atlantic, an upward revision to the US GDP data for the second quarter supported the greenback against the majors in Friday’s trading session. Across Europe, today’s German consumer price inflation reading will be closely watched, as disappointing data might heighten speculation for additional stimulus measures
Yesterday, the BoE Governor, Mark Carney, reiterated that the central bank was moving closer to increasing interest rates, although the exact timing will be dependent on the nature of economic data in the nation. The hawkish comments from the BoE Chief lent support to the Pound against the majors. With little on the domestic economic deck today, markets will eye some crucial economic releases in the UK due next week for further direction.With the ECB President reiterating his dovish stance and recent macro data in key European economies showing headwinds in recovery, next week’s consumer price inflation data from major European economies along with the ECB’s monetary policy meeting will be closely watched.