Today’s public sector borrowing report for November revealed that government debt in the UK continued to rise, weakening hopes that the British Chancellor might be able to reach his deficit reduction targets this fiscal year. The report provided little relief to Sterling investors after the GfK survey released earlier today indicated that morale among consumers in the UK weakened surprisingly for December.Across the Atlantic, market participants are likely to keep a tab on speeches by Fed officials, Jeffrey Lacker and Charles Evans, later today to get more clarity on the US Fed’s policy guidance going forward, especially after it dropped the “considerable time” phrase from its post-meeting policy statement.
Today’s data has shown an improvement in Britain’s retail sales for November. This has strengthened market speculation that domestic spending is improving, especially after yesterday’s labour market report showed that wage growth grew at a stronger than expected pace. Against this backdrop, traders will eye tomorrow’s GfK survey to better understand consumer morale in the UK for the fourth quarter.Across the Atlantic, the US Dollar moved sharply higher yesterday after the Fed dropped the “considerable time” language from its policy statement and provided an encouraging assessment of the economy. Traders will now eye economic data in the US going forward to verify if the Fed remains on its path to raise the key interest rate next year.
Data just released indicated that the unemployment rate in the nation remained at 6% and domestic wage earnings improved more than expected for the three months ended October. Meanwhile, the minutes of the BoE’s latest policy meeting indicated that policymakers remained divided over the central bank’s current stance. However, Sterling showed little reaction to today’s domestic macro updates as investors remained focused on the outcome of the US Fed’s policy meeting scheduled later today. Although the central bank is expected to keep its stance unchanged, traders will eye the post-meeting policy statement for further direction.Across Europe, today’s first round of Presidential elections in Greece will keep Euro investors on their toes.