UK manufacturing drops

From the UK yesterday we saw manufacturing numbers released which showed that the sector shrank by 0.4% in October, leaving the industry well below the highs seen in 2008, while the housing market has been seen to slow down, too, as prices have ceased to rise as fast as earlier in the year. However, UK production in October was seen to grow by 0.1%, and later on yesterday we saw how the GDP estimate (NIESR) for Sep-Nov came in at 0.6% growth – the forecasts for 2015 is then 2.4%, while for 2016 it’s 2.3%. Together with these estimates, it was also predicted that interest rates will increase this coming Feb. With all these mixed signals abounding, GBP did, unfortutely,lose some strength to the euro and dollar.

Today from the UK we’ll see FPC minutes released, but eyes will be mostly trained on tomorrow’s MPC interest rate decision and accompanying minutes and statement.

On the mainland, EUR continued its positive run, particularly against GBP –although, this might have been more spurred on by concerns over markets elsewhere as opposed to over-flowing confidence in the Eurozone. The only data we saw yesterday was GDP for the commonality which came in at 0.3% as expected. All we really saw of concern yesterday was Germany’s finance minister saying that he might be willing to take legal action to prevent the deposit protection scheme come into effect across the whole Eurozone because of the potential negative impact on the Germans should the scheme implode at some point down the line.

In the US, oil prices have been the focus this week as we have seen a 12% drop in prices recently. But, while this usually equates to USD strength, there hasn’t been much strengthening to speak of against other majors, only some commodity-based currencies. This will all form part of the decision-making process about the potential interest rate hike next week.