13 Nov 2013
Morning outlook: Bank of England in focus
FXstreet.com (London) - UK jobless claims are expected to fall another 30k holding the unemployment rate at 7.7 percent. However, the Bank of England inflation report is likely to have greater market significance. The BoE is unlikely to make any changes to forward guidance. With unemployment falling faster than expected, it may bring its forecasts for the unemployment rate falling below 7 percent forward, to the first quarter 2016, with markets pricing a rate hike early 2015 as a result.
Effects on sterling depend on the emphasis taken by the BoE. Bringing unemployment forecasts forward by a quarter will be sterling positive. However, should it focus on inflation meeting BoE targets, the pound will remain under pressure.
In the US, there is little of significance ahead of Janet Yellen’s confirmation hearing in the Senate tomorrow, where she will be confirmed as the successor to Fed Chairman Ben Bernanke. She is unlikely to say anything unexpected, and will continue in Bernanke’s dovish footsteps, voicing support for the role of the Fed in supporting economic recovery.
In Europe, expectations are for a 0.3 percent contraction in industrial production in September. This would mean a 0.1 percent quarter-on-quarter contraction, after expanding 0.7 percent in the second quarter. The contraction would reinforce expectations of a drop from last quarter in GDP results released tomorrow.
Effects on sterling depend on the emphasis taken by the BoE. Bringing unemployment forecasts forward by a quarter will be sterling positive. However, should it focus on inflation meeting BoE targets, the pound will remain under pressure.
In the US, there is little of significance ahead of Janet Yellen’s confirmation hearing in the Senate tomorrow, where she will be confirmed as the successor to Fed Chairman Ben Bernanke. She is unlikely to say anything unexpected, and will continue in Bernanke’s dovish footsteps, voicing support for the role of the Fed in supporting economic recovery.
In Europe, expectations are for a 0.3 percent contraction in industrial production in September. This would mean a 0.1 percent quarter-on-quarter contraction, after expanding 0.7 percent in the second quarter. The contraction would reinforce expectations of a drop from last quarter in GDP results released tomorrow.