EUR
Yesterday data from the Eurozone showed the trade surplus in the currency bloc
has doubled month on month. Eurozone trade in goods with the rest of the world
jumped to 18.5bn EUR’s in September, up from 8.6bn EUR’s in August. Exports
rose by 4.2% month on month, while imports rose by just 3%.

However, the UK’s trade gap with the euro area has widened this year,
suggesting the weak euro economy and stronger pound are hitting British

EUR
Yesterday data from the Eurozone showed the trade surplus in the currency bloc
has doubled month on month. Eurozone trade in goods with the rest of the world
jumped to 18.5bn EUR’s in September, up from 8.6bn EUR’s in August. Exports
rose by 4.2% month on month, while imports rose by just 3%.

However, the UK’s trade gap with the euro area has widened this year,
suggesting the weak euro economy and stronger pound are hitting British
companies. In the first 8 months of 2014, the Eurozone exported 7% more goods
to the UK than a year ago but imported 3% less. Eurozone exports to China are
also up by 7% between January and August, but exports to Russia are down 15% as
sanctions take their toll.

ECB president  Mario Draghi spoke yesterday and  expects a
moderate pick up in growth next year, however, the euro area growth did lose
momentum over the summer. He also reiterated that monetary policy cannot do
everything by itself. National governments must also act and implement
structural reforms. 

The euro weakened as Draghi said “unconventional measures” that the ECB may
consider in its battle to boost growth in the region might include
sovereign-bond purchases.

GBP
In a report released yesterday some  economists
now  believe that interest rates may not rise off their record lows
until 2016. They also revised their growth forecasts for 2015 downwards to 2.4%
from 2.6%, lower than BoE forecasts.

During an interview yesterday Bank of England Governor Mark Carney and his
chief economist, Andy Haldane, indicated they are focused on downside risks to
inflation as the central bank emphasizes the reasons for keeping loose monetary
policy. With consumer-price growth below the BOE’s target.

The comments came days after the BOE lowered its U.K. growth and inflation
forecasts because of global expansion and stagnation in Europe. The central
bank’s nine-member Monetary Policy Committee kept its key interest rate at a
record-low 0.5 percent this month, and Carney said in the interview that low
borrowing costs were justified because of slack in the labour market, among
other issues

Key
Announcements:
09:30 GBP : UK inflation (YoY) Oct expected to rise to 1.3 from 1.2%
14:00 EUR : Eurozone  ZEW Economic Sentiment Survey (Nov)
expected to rise to 0.5%

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