Sterling will likely stay quiet until Thursday’s Bank of England meeting. With no economic data this week until the interest rate decision. There is huge speculation on whether there will be a rise in interest rates or not. Positive data last Wednesday hints towards a strong possibility. Expect coverage on this to ramp up as the week progresses.
Last week’s positive durable goods figures on Wednesday has heightened the pressure on the Fed to raise interest rates in December. Initial jobless claims on Thursday and preliminary Q3 GDP figures on Friday afternoon also beat expectations.
A slow couple of days expected for USD before ISM manufacturing figures on Wednesday afternoon. Then in the evening we have the Fed interest rate decision. Traders are not expecting a raise but all eyes will be on the comments that follow as to whether they indicate a possible raise or not in December. Another big day for USD on Friday with the unemployment rate expected to improve along with the non-farm payrolls.
Last week the ECB announced that it will start to cut back its quantitative easing programme. On Friday Catalonia finally declared independence from the Spanish state, triggering waves of celebration and counter protests over the weekend. Elections have been called and must take place before December 21st. Although there will be a huge number of hurdles to jump until Catalan voters go to the polls.
Eurozone inflation and GDP figures are out tomorrow and as suggested by the ECB last week, expected to fall slightly. Euro likely to remain at similar levels with no significant data for the rest of the week.