Eyes to remain on key fundamentals from the UK, euro area
Sunday, January 19, 2014
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This week, the focus to remain on economic data from the United Kingdom and the euro area as investors seek to gather clues about the strength of recovery.
Starting with the U.K., eyes will focus mainly on unemployment data and BOE minutes.
The importance of unemployment has increased significantly after the BOE decided in August to link the bank’s guidance with a threshold of 7.0 percent.
Jobless rate for the quarter through October, measured by International Labour Organization methods, unexpectedly fell to the lowest in 4 1/2 years of 7.4 percent from a prior of 7.6 percent.
Data due this week may show that unemployment resumed its lurching toward the 7 percent threshold by dropping further to 7.3 percent in the three months ended November.
The report may also signal a 32,000 fall in jobless claims in December after dropping 36,700 in November.
Now, many analysts predict that the threshold of 7.0 percent would be reached earlier than expected, defying the BOE expectations five months ago that the 7% threshold would not be reached until 2016.
Policymakers decided this month to keep both interest rate and amount of asset purchases on hold amid the progress in economic data and ease in inflation to target.
The minutes may show that the decision was unanimous, but we may see also some members asking for a start to raise interest rates in 2014 after the recent improvement.
UK economy probably widened expansion in the last three months of 2013 to 1 percent last quarter from 0.8 percent in the three months through September, Markit Economics projected this month.
In the euro area, the advanced PMI manufacturing and services data will get investors’ attention as it will show the pace of expansion in the first month of the new year.
A PMI composite of manufacturing and services will widen expansion in January to 52.5 from 52.1 in December, according to median forecast.
The manufacturing sector in Germany probably expanded further in January to 54.7 versus 54.3 while the services gauge rose to 54.0 from 53.5.
Meanwhile, there is more confidence the 18-nation region would continue a gradual recovery this year.
A report due this week may show that German investor confidence resumed its advance for a sixth straight month in January to 63.4 after hitting the highest level in more than seven years of 62.0 last month.
Ayman Khlifat on Twitter @aymankkhlifat
Email : Aymanfxsignals@yahoo.com
This week, the focus to remain on economic data from the United Kingdom and the euro area as investors seek to gather clues about the strength of recovery.
Starting with the U.K., eyes will focus mainly on unemployment data and BOE minutes.
The importance of unemployment has increased significantly after the BOE decided in August to link the bank’s guidance with a threshold of 7.0 percent.
Jobless rate for the quarter through October, measured by International Labour Organization methods, unexpectedly fell to the lowest in 4 1/2 years of 7.4 percent from a prior of 7.6 percent.
Data due this week may show that unemployment resumed its lurching toward the 7 percent threshold by dropping further to 7.3 percent in the three months ended November.
The report may also signal a 32,000 fall in jobless claims in December after dropping 36,700 in November.
Now, many analysts predict that the threshold of 7.0 percent would be reached earlier than expected, defying the BOE expectations five months ago that the 7% threshold would not be reached until 2016.
Policymakers decided this month to keep both interest rate and amount of asset purchases on hold amid the progress in economic data and ease in inflation to target.
The minutes may show that the decision was unanimous, but we may see also some members asking for a start to raise interest rates in 2014 after the recent improvement.
UK economy probably widened expansion in the last three months of 2013 to 1 percent last quarter from 0.8 percent in the three months through September, Markit Economics projected this month.
In the euro area, the advanced PMI manufacturing and services data will get investors’ attention as it will show the pace of expansion in the first month of the new year.
A PMI composite of manufacturing and services will widen expansion in January to 52.5 from 52.1 in December, according to median forecast.
The manufacturing sector in Germany probably expanded further in January to 54.7 versus 54.3 while the services gauge rose to 54.0 from 53.5.
Meanwhile, there is more confidence the 18-nation region would continue a gradual recovery this year.
A report due this week may show that German investor confidence resumed its advance for a sixth straight month in January to 63.4 after hitting the highest level in more than seven years of 62.0 last month.
Ayman Khlifat on Twitter @aymankkhlifat
Email : Aymanfxsignals@yahoo.com
