There was some good news from the UK yesterday, via manufacturing data, which came in better than expected. With a rise of 0.5% in August instead of the 0.3% anticipated, we’ve seen an uptick thanks to UK auto plants coming back online after their usual summer break. With the various problems the industry has faced following the financial crises and global slowdown, this improvement offers a lot of needed positivity to the UK’s Manufacturing sector. We won’t see much data for the UK today aside from BoE official bank rate votes and a summary of what occurred at the Monetary Policy Committee meeting. There won’t be any significant data released, but what pundits will pay attention to is how people voted which gives an insight into when an interest rate rise might happen.
Europe’s woes continued when we saw German industrial production come in lower than expected –2.4% worse than the month before – a knock-on from the issues we saw from China the other month. The worry now also exists that the problems in Germany will spread to weaker economies in the Eurozone. This morning showed more problems for Germany with a trade balance drop of €2.8Bn. Out, too, today will be meeting minutes from the ECB meeting last month which will offer insight into what and how they’re thinking.
The US was quiet in terms of data – the only news being the release of note auction and consumer credit changes – neither of which had much sway over USD strength. Today, however, is different with the release of the FOMC’s meeting minutes where a determination will be made on what action needs to be taken in terms of monetary policy. All eyes and ears will be honed in on when a rate hike might occur.
Elsewhere, news was released that the Bank of Japan will be holding off adding to its stimulus package, a contentious decision given that there have been recession signs in the economy, and the knock-on effect from problems in China. But, this hasn’t stopped the government pledging to put YEN80 trillion worth of government bond purchases in place annually.
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