• UK inflation data might be especially relevant for the GBP at this juncture
  • US industrial production could be affected by the hurricanes
  • Several central bank speakers on the agenda with BoE’s Carney being a cherry on top

Tuesday seems to be all about the inflation report from the British economy which ought to be closely watched due to an adverse impact which CPI has already had on real wage growth. Moreover, we’ll know industrial production from the US economy which might be afflicted by the hurricanes though. Finally, several central bank speakers are going to have their speeches later in the day.

9:15 am BST – Mark Carney begins testifying before the UK’s Parliament Treasury Committee: The GBP is bound to be the most shaky currency today. Beside the inflation reading, we’ll have Carney’s appearance before the Treasury Committee, the first time since June’s election. The Committee is also holding hearings with Tenreyro and Ramsden, the newest members of the MPC.

9:30 am BST – UK inflation report: The inflation data is always worth looking at as it crucially impacts monetary policy. Conventional wisdom is that the higher inflation, the larger odds for higher interest rates, but this is not the case as far as the UK economy is concerned, at least not yet. Britons have suffered from negative real wage growth which has reflected in consumer outlays. Thus, if inflation keeps rising going forward, it could be a major reason why the BoE could choose to hike rates in November. Bear in mind that this week’s set of data will be the last one before the BoE’s meeting scheduled on 2 November. The consensus points to 3% yoy in case of headline and 2.7% yoy for a core gauge.

10:00 am BST – German ZEW survey: This is the soft indicator which has a much less relevant impact than PMIs, hence its influence on currencies should be insubstantial. Either way, the headline is expected to come in at 88.5 in October.

2:15 pm BST – US industrial production: The US dollar got a mixed bag of the data on Friday when inflation and retail sales were a bit weaker than expected while consumer confidence measured by the University of Michigan surged above 100. As a result, the greenback has slightly outperformed its major peers since then and it’s the strongest currency in the G10 in early trading on Tuesday. There are assumptions that September’s industrial output could have been affected by adverse weather conditions, hence a lower release should be taken into account. The street’s call suggests a 0.3% mom rise in the last month.

Beside the BoE’s members we’ll have several more central bank speakers, the full tally looks as follows:

  • 9:00 am BST – ECB’s Constancio
  • 10:30 am BST – ECB’s Praet
  • 2:30 pm BST – BoE’s Brazier
  • 6:00 pm BST – FED’s Harker
  • 8:30 pm BST – BoC’s Wilkins

link do file download linkThe GBPUSD has regained its bullish momentum but has bounced off a resistance at 1.33 of late. In effect, a pullback towards a lower limit of a channel may be possible. Source: xStation5