Today’s GfK report indicated that morale among consumers in Britain deteriorated for October. With inflation in the UK outpacing wage growth, the weakness in consumer sentiment probably signals some fatigue in Britain’s consumer-led growth. Meanwhile, Sterling investors will keep a tab on PMI readings along with the BoE policy meeting scheduled next week for further direction to risk appetite.Currency markets witnessed some action earlier today after the Bank of Japan unexpectedly expanded its monetary stimulus. With the weekly session drawing to an end, market focus for today is on the Euro zone consumer price inflation print to ascertain if the ECB needs to do more at its policy meeting due next week.
Nationwide has reported that house prices in the UK continued to grow for October, albeit at a slower pace, compared with same period previous year. However, the Pound has continued to trade under pressure against the majors, largely hurt by yesterday’s US Fed monetary policy decision. Additionally, the recent dovish comments from BoE officials has strengthened prospects of a delay in the timing of an interest rate rise in the nation.Across the Atlantic, the flash estimate of the third quarter GDP reading due later today will be an important event. In Germany, today’s preliminary reading of consumer price inflation is expected to show an acceleration, thereby easing concerns over a deflationary threat in the Euro zone.
Today’s domestic macro data has revealed that mortgage approvals fell for a fourth consecutive month during September along with a drop in the nation’s consumer credit demand. However, the Pound has shown little reaction this morning and is trading above the 1.61 mark against the US Dollar, partly supported by yesterday’s weak US durable goods orders data. However, it remains to be seen if Britain maintains the growth momentum during the fourth quarter amid signs of some fatigue in consumer-led growth.With the US Fed poised to end its bond buying programme this month, the post-meeting policy statement later today will be keenly eyed to gauge if the central bank offers any hints over the timing of an interest rate rise in the nation.