GBP

So the big news
yesterday was the speech made by Mark Carney. Carney has said he will now wait
until the spare capacity in the economy is filled before he looks at raising
interest rates. This is basically the gap between current output and where they
think output could be. This is estimated to be 1-1.5% of GDP at present. This
changes the goalposts on the previous forward guidance plan which centred on
the unemployment rate breaching below a 7% threshold.

GBP

So the big news
yesterday was the speech made by Mark Carney. Carney has said he will now wait
until the spare capacity in the economy is filled before he looks at raising
interest rates. This is basically the gap between current output and where they
think output could be. This is estimated to be 1-1.5% of GDP at present. This
changes the goalposts on the previous forward guidance plan which centred on
the unemployment rate breaching below a 7% threshold.

Also
the Bank of England said it expects fourth
quarter GDP growth will be revised up to 0.9% from the 0.7% estimated. It
forecasts a similar pace of expansion this quarter. For the full-year 2014, it
raised its projection to 3.4% from 2.8% in November.

The
central bank sees inflation at 1.9% in three years, below its goal. Citing
subdued global prices, falling commodity costs and strengthening of the pound.

EUR

The
euro weakened off considerably yesterday. Basically a member of the European Central
Bank stated they are seriously considering taking its overnight bank deposits
into negative territory. This basically penalises banks for holding excess
funds at the central bank and is meant to help kick start the flow of credit to
households and businesses. Current lending to households and businesses fell
2.3% in December, the steepest drop in two decades.

There
was also disappointing industrial production figures out in the Eurozone. The
figure came in at growth of 0.5%, missing forecasts of 1.8%.

This
morning we have also had data from Germany showing that the rate of inflation
in the country has dropped from 1.4% to 1.3%

Key Announcements:

13.30pm
– USD – Initial Jobless Claims: Expected to fall by 1,000.

13.30pm
– USD – Retail Sales (Jan): Expected to fall to 0%.