Summary:

  • The UK inflation data in limelight today, will this report help GBP?
  • Investors await another strong ZEW reading 
  • Key central bankers are to speak in Frankfurt

 Tuesday is all about the UK inflation data for October. Another strong release may spur expectation for further tightening from the Bank of England and help somewhat weakened GBP recover. Moreover, we’ll get noteworthy data from Europe: ZEW Sentiment Index and the second GDP reading for the third quarter from the eurozone. Last but not least heads of major central banks will speak at a joint panel in Frankfurt.

9:30 am – UK, CPI release for October. The Bank of England lifted interest rates for the first time in more than a decade. Inflation is the main concern for the Bank so the pound traders will be on their heels on Tuesday and another strong reading could help GBP recover some of its recent losses. However, there are legitimate concerns about fitness of British consumers amid a decline in real incomes so the data on sales, which will be out tomorrow, could be nearly just as important. Consensus calls for an increase in CPI from 3,0% yoy to 3,1% yoy. 

10:00 am BST – Germany,  ZEW Economic Sentiment: Market expects another strong reading from Germany underlying a good shape of the biggest European economy. The reading is expected to come in at 20.0, while previously it showed 17.6.

10:00 am BST – EZ, the second GDP reading for the third quarter. Investors expect that European economy sustained a dynamic growth momentum and the ECB’s decision to extend the QE programme should support further development. The preliminary reading pointed out for growth of 2.5% yoy.

1:30 pm BST – US, PPI indices for October. Producer Price Index is treated like a good prognosis ahead of Consumer Price Index, hence market participants are bound to pay attention to the former today for sure. The street’s call points to a 2.4% yoy for the headline PPI and a 2.3% yoy pick-up as to the core gauge (stripping out food and energy).

9:40 pm BST – US, Crude oil stocks by API. Oil had an excellent previous week as stock data surprised to the upside and investors started to broadly expect OPEC to extend its oil supply cuts to the end of 2018. The today’s report as always should set the bar before the governmental data on Wednesday.

We’ve got also plenty of central bank speakers today. It’s especially worth looking at the ECB’s monetary policy panel in Frankfurt with heads of Fed, ECB, BoE and BoJ.

  • 8:05 am BST, Fed’s Evans Speaks in Frankfurt
  • 9:00 am BST,  ECB’s Lautenschlaeger Speaks in Frankfurt
  • 9:00 am BST, ECB’s Nouy Speaks in Frankfurt
  • 10:00 am BST, Draghi, Yellen, Carney, Kuroda Speak in Frankfurt
  • 12:45 pm BST: ECB’s Villeroy de Galhau Speaks in Paris
  • 1:30 pm BST, ECB’s Coeure Speaks at ICMA General Meeting
  • 3:30 pm BST, ECB’s Benoit Coeure Speaks in Brussels
  • 5:30 pm BST, BOE’s Cunliffe speaks in Oxford

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 Better inflation readings may help GBPUSD rebound from the lower limit of an ascending channel. Source: xStation5