Today, the global economic calendar is dominated by a raft of services PMI figures of the major economies. Amongst which, the just released latest print of October services PMI in the UK was consistent with a strong pace of activity as the PMI index pencilled in better than expected reading. The upbeat data has come in ahead of tomorrow’s BoE monetary policy announcement and inflation report.

In Europe, most of the economies reported a slight pickup in growth rates of service sector activity for October, adding to optimism that the sector will be one of the drivers to wider Euro area recovery in the fourth quarter. Across the Atlantic, markets will eye the ADP employment report, the latest ISM services numbers and also note a number of key Fed officials’ speeches today.

Pound Sterling – UK Markets

Sterling has picked up pace against the US Dollar this morning after the just released services PMI indicated a rise in activity for October. The headline services index has topped market forecasts at the beginning of the fourth quarter, reviving growth prospects for the UK economy and supporting the case for a BoE rate rise in the near term. The improvement in the services PMI reading has come at the same time, when markets saw a surprisingly strong surge in British manufacturing growth and continued expansion in the UK construction sector, thus paving the way for the economy to recover strongly in the fourth quarter. However, this optimism is unlikely to be translated at tomorrow’s BoE meeting as the policymakers will wait for further improvement before deciding to make a change in its monetary policy stance.

Earlier today, a slightly smaller rate of decline in BRC shop price index for September indicated that the UK consumers reaped benefits of persistent shop price deflation, with clothing, books and DIY items showing the biggest drops.

US Dollar – US Markets

The US Dollar has managed to retain some of its gains against the common currency this morning, with the greenback investors looking forward to fresh cues later in the session to gauge the strength of the US economy at the start of the fourth quarter. Today, the latest ISM services numbers and the final services PMI data for October will be eyed for signs of acceleration in the macro trend on the back of robust services sector activity in the nation.

Markets will also get an early picture of the performance of the US labour market in October through the ADP employment change numbers slated for release later in the day, ahead of key official jobs report on Friday. Though the nonfarm payrolls report later this week is anticipated to show a substantially stronger gain for last month, today’s ADP update will be scrutinized for signs that could add to expectations of a rebound in the US labour department’s estimate. While monitoring these reports, market participants will wait on the sidelines for the testimony by the Fed Chairwoman Janet Yellen as well as speeches by a number of other key Fed officials later today.

Euro – European Markets

The Euro is trading on a weaker footing against the majors this morning. The losses in the shared currency has intensified following yesterday’s dovish comments by the ECB Chief, who reiterated that the central bank would reassess its current stimulus programme in the December meeting and opt for further easing if needed. More comments by the ECB President are currently coming in and markets are carefully monitoring his remarks while they also digest a slew of services PMI reports that were published earlier today in Europe.

According to the latest Markit survey results, economic activity in the Euro area at the start of the fourth quarter found a major support from the service sector companies. The final reading of the Euro zone’s services PMI for October showed a small upturn in the activity growth rate from September, but it missed the advance estimates. Amongst the Euro zone economies, Spain remained the fastest growing of the region’s four largest economies, while the final outcome for Germany was not as encouraging as the services PMI, which underperformed expectations.

Other Currencies – Highlights

The Japanese Yen is currently trading lower against the US Dollar this morning, while currency traders paid little attention to better than expected economic data released earlier today in the world’s third largest economy. A survey data showed that activity at Japan’s service sector firms expanded at the fastest pace for the second time in over a year for October, buoyed by a sharp increase in new export orders. However, among the individual components, service sector business sentiment was the weakest since May as some of the firms remained cautious about demand outlook particularly due to slowdown concerns emanating from China. Also, employment levels dipped at the quickest pace since December 2011, adding to backlogs of volumes of unfinished work. Separately, Japan's consumer confidence improved more than expectations for October after falling in the prior month.

In the session ahead, investors will watch out for a number of key US economic releases and also monitor remarks by a plethora of Fed speakers for further direction.