The British Pound may find support as the Bank of England opts for a wait-and-see approach in its Inflation Report, signaling additional QE is unlikely for now.
Talking Points
Pound May See Near-Term Gains as BOE Inflation Report Dents QE Outlook
US Dollar, Yen Fall on Risk Rebound China’s Leadership Make-Up Clarifies
The release of the Bank of England Inflation Report headlines the calendar in European hours. Traders will comb the document for clues about the likelihood of expanded QE efforts in the months ahead as well as guidance on the success of the new FLS lending program. UK economic data has performed broadly better relative to expectations over recent weeks, suggesting a wait-and-see posture is likely. This may ease near-term fears of further dilution and offer a bit of a lift to the British Pound, although follow-through is likely to be relatively limited considering this is already the base-case scenario at play in the markets. Separately, UK Jobless Claims are set to hold flat in October.
The US Dollar and Japanese Yen slumped amid waning safe-haven demand as risk appetite firmed across forex markets in overnight trade. Newswires chalked up the outcome the emergence of a degree of certainty on political leadership in China, where the 18th Communist Party Congress wraps up today. Vice President Xi Jinping and Vice Premier Li Keqiang were reportedly reappointed to the Party’s Central Committee, putting them in a position to take the reins and thereby reinforcing the markets’ status quo scenario for who would be in charge of the world’s second-largest economy for the next decade.
Asia Session: What Happened
GMT
CCY
EVENT
ACT
EXP
PREV
21:45
NZD
Retail Sales Ex Inflation (QoQ) (3Q)
-0.4%
0.4%
1.3%
23:30
AUD
Westpac Consumer Confidence (NOV)
5.2%
–
1.0%
23:30
AUD
Westpac Consumer Confidence Index (NOV)
104.3
–
99.2
0:30
AUD
Wage Cost Index (QoQ) (3Q)
0.7%
0.8%
1.0%
0:30
AUD
Wage Cost Index (YoY) (3Q)
3.7%
3.8%
3.7%
2:00
NZD
Non Resident Bond Holdings (OCT)
62.4%
–
62.4%
Euro Session: What to Expect
GMT
CCY
EVENT
EXP/ACT
PREV
IMPACT
7:45
EUR
French CPI Ex Tobacco Index (OCT)
124.81 (A)
124.74
Low
7:45
EUR
French CPI – EU Harmonised (YoY) (OCT)
2.1% (A)
2.2%
Low
7:45
EUR
French CPI – EU Harmonised (MoM) (OCT)
0.2% (A)
-0.3%
Low
7:45
EUR
French CPI (MoM) (OCT)
0.2% (A)
-0.3%
Low
7:45
EUR
French CPI (YoY) (OCT)
1.9% (A)
1.9%
Low
9:30
GBP
Jobless Claims Change (OCT)
0.0K
-4.0K
High
9:30
GBP
Claimant Count Rate (OCT)
4.8%
4.8%
Medium
9:30
GBP
Employment Change (3M/3M) (SEP)
135K
212K
Medium
9:30
GBP
Weekly Earnings exBonus (3M/YoY) (SEP)
2.0%
2.0%
Low
9:30
GBP
Average Weekly Earnings (3M/YoY) (SEP)
1.9%
1.7%
Low
9:30
GBP
ILO Unemployment Rate (3M) (SEP)
7.9%
7.9%
Medium
10:00
CHF
ZEW Survey (Expectations) (NOV)
–
-28.9
Medium
10:00
EUR
Euro-Zone Industrial Production (MoM) (SEP)
-2.0%
0.6%
Low
10:00
EUR
Euro-Zone Industrial Production (YoY) (SEP)
-2.2%
-2.9%
Medium
10:00
EUR
Italy to Sell 2015, 2023 and 2029 Bonds
–
–
Medium
10:30
GBP
Bank of England Inflation Report
–
–
High
Critical Levels
CCY
SUPPORT
RESISTANCE
EURUSD
1.2665
1.2833
GBPUSD
1.5846
1.5938
— Written by Ilya Spivak, Currency Strategist for Dailyfx.com
To contact Ilya, e-mail ispivak@dailyfx.com. Follow Ilya on Twitter at @IlyaSpivak
To be added to Ilya’s e-mail distribution list, please CLICK HERE
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.Learn forex trading with a free practice account and trading charts from FXCM.
Source: Daily fx