With the UK failing to add anything to the markets due to the bank holiday Monday, a quiet start to the week was always going to be inevitable. The only data of any note was from the US where July’s durable goods orders failed to meet expectations but some margin. After a positive figure in June, orders were expected to fall by 4% however the actual data showed a drop of almost 8%. At a time when all eyes are on the Federal Reserve with expectations of a change in monetary policy, lacklustre data like this will not help the Fed make up their mind anytime soon albeit the durable goods orders are not regarded as ‘key’ fundamental data.
Briefly focusing on last week, we saw more bad news for the US as new home sales saw the biggest drop since May 2010. In the Eurozone however, consumer confidence reached the dizzying heights of July 2011 which really falls in line with recent set up good data from the Eurozone including positive GDP figures. Whether or not this continues with rumours that Greece will need a third bailout remains to be seen.
Overall this week is a quiet one in terms of data from the UK. The most prevalent news is that of Mark Carney is due to speak on Wednesday regarding the status of the UK economy. One would be forgiven for thinking that this will most likely be Carney defending the Bank of England’s stance on interest rates now that they have linked them with the employment situation in the UK however he may also be expected to talk about the QE program in the UK as last week, another member of the MPC hinted that more QE may be required to assist the recovering economy.
Tuesday will see the US consumer confidence published with an expectation that this will fall. The GBP USD has dropped slightly although no large moves have occurred since Friday. Against the euro, the pound has fallen predominantly due to the consumer confidence figures from the Eurozone on Friday despite the UK Q2 GDP upward revision from 0.6% to 0.7% which technically puts growth slightly ahead of where forecasts have suggested it will be by the end of the year.
15.00pm - USD - Consumer Confidence: Expected to
fall to 79.0