There was some good news for the UK’s CPI index yesterday as we saw November’s numbers move back into positive territory from the lows of September/October. Last month’s reading came in at 0.1%, and what we are now seeing is a needed increase in wage growth of between 2.5% and 3%. However, what the BoE wants to see is inflation at 2%. What wasn’t so good for the pound was a loss of 0.6 against the dollar, and we also saw the Bank of England Governor make mention of his desire to clamp down on ‘buy to let’ mortgages to help an ailing housing market.
Today from the UK we’ll see a host of employment data.
There wasn’t much positivity to speak of for the euro yesterday, unfortunately, as it lost out to most of its competitors. This is, in all likelihood, on the back of jittery nerves ahead of the interest rate announcement out of the US today, although German ZEW numbers did come in above last month’s figure which may have helped prevent total annihilation. Already this morning we have already seen French manufacturing numbers come in strong, but services data has been a bit weak. German services and manufacturing data has come in as expected which is good news as Germany still appears to be holding the line for EUR.
As mentioned, Europe awaits the interest rate announcement today from the States as there is bound to be some knock-on effect for the single currency.
US inflation was seen to fall yesterday year-on-year which saw an increase of 0.5%, causing an increase of 1.4% versus EUR, and 1% versus GBP. CPI numbers appear to be the primary reason behind the upwards movement, but there was an element was weakness in that the monthly figure had actually shown stagnation. The upwards movement seems to be based on investors’ positioning ahead of today’s big day for the dollar. We all wait with baited breath of news of the fable US interest rate hike to finally happen.
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