Yesterday morning German business confidence unexpectedly rose for the first time in seven months after the country’s economy returned to growth and the ECB added stimulus to the eurozone. This helped the Euro move about a quarter of a cent after trading near a two-year low against the dollar early in the session. The consensus among economist was for a positive figure of 103 but the final figure was higher at 104.7.
ECB member and Bundesbank president Jens Weidmann has suggested yesterday that loosing monetary policy could encourage short term demand. He did however reiterate that to enhance growth, essential structural reforms from EU member countries were vital for long term growth in the eurozone.
Yesterday The Dallas Fed’s monthly manufacturing index for November showed that general business activity remained unchanged at 10.5, the same level as October but better than the expected forecast fall to 9.
However the production index, a key measure of manufacturing conditions, fell from 13.7 to 6, indicating output growth slowed in November. Markit’s purchasing managers index fell from 57.1 in October to 56.3, below expectations and the lowest reading since April. A fifth consecutive fall in growth in the service sector suggests that the economic upturn in the US has lost considerable momentum, though it is important to note that the pace of expansion remains robust by historical standards.
Today in the US we have GDP which is expected to come out lower. If the figure released is in line with expectations we could see some Dollar weakness. However consumer confidence figure is released 90 minutes later and is expected to be a positive reading, and the dollar could rise again ultimately this could cause some volatility for the USD throughout the day.
In the UK, we have mortgage approvals which are expected to have slowed down, so we could see a slight dip in GBP after the figure is released if it is in fact a lower figure than last month.. There is also an inflation report hearing at 10 am from the treasury committee this morning so we could see some volatility while Mark Carney testifies in front of parliament today.
09:30 - GBP : UK Mortgage approvals (Oct) expected to be lower at
38.5 from 39.3
10:00 - GBP: UK Quarterly Inflation Report Hearing
13:30 - USD : US Q3 GDP figures expected to be lower to 3.3% from 3.5%
15:00 - USD : US Consumer Confidence (Sept) expected to be higher at 96 form 94.5
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