The Day Ahead: Top 3 Things to Watch
US macro data on tap
Tuesday marks the start of busy week on the calendar for top-tier U.S. economic data with the release of wholesale inflation for October and speeches from Fed members.
Analysts expect a 0.1% increase in inflation for October at the wholesale level, measured by the producer price index, compared to a 0.4% increase in the previous month.
Following the release of the wholesale inflation data, investor attention will shift to monetary policy as speeches by FOMC members Bullard and Bostic could provide further insight into the Fed’s thinking on monetary policy tightening.
Investors are also expected parse comments from Fed chair Janet Yellen, who is part of a panel of central bankers at the ECB-hosted conference in Frankfurt.
The dollar rose against its rivals on Monday but remained under pressure amid ongoing concerns over tax reform.
Pound to receive a boost?
GBP/USD could be the ‘one to watch’ in Tuesday’s session as investors looked ahead to UK inflation data and speech by Bank of England governor Mark Carney.
Economists are forecasting that the consumer price index (CPI) rose at an annual rate of 3.1% in October, up from 3.0% in September.
Inflation has remained well above the Bank of England’s 2% target, which prompted the Bank of England to raise rates in early November for the first time in decade.
Investors are expected to closely monitor comments from Bank of England governor Mark Carney for any clues on monetary policy as he is slated to deliver a speech as part of a panel at the ECB-hosted conference in Frankfurt.
Eurozone top-tier macro data on tap
Nearly a month after the European Central Bank kept interest rates unchanged and trimmed its monthly bond purchases to €30 billion, investors look ahead to release of Eurozone growth data due Tuesday.
Eurozone third-quarter economic growth, measured by gross domestic product (GDP), is expected to remain steady at 2.5% following a similar rate of growth in the second quarter.
EUR/USD rose 0.01% to $1.1667.
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