A kind of hush
The scaling back of the row over fishing licences with France failed to give sterling much impetus yesterday, and it has continued to trade in a very narrow range with a slight bias to the downside.
The pound is likely to stay trading in a similar fashion ahead of tonight’s announcement from the Federal Reserve and tomorrow’s Monetary Policy Meeting at the Bank of England. The only macro-economic data that may pique investors’ interest is the IHS Markit Purchasing Managers Index for the service sector released later this morning.
According to the latest report from IHS Markit, European Purchasing Managers are still worrying about supply bottlenecks, particularly in Germany. The indexes put a little pressure on the euro in quiet trading yesterday, and overnight it has slipped slightly against the dollar as the Fed’s decision comes into focus.
This morning Eurostat will publish the September Eurozone Unemployment Rate, and later, European Central Bank board member Frank Elderson will speak twice at the Cop26 conference. However, this afternoon’s speech at the celebrations for the 175th anniversary of the Banco de Portugal by ECB President Christine Lagarde may be more enlightening on current ECB policy.
The US stock market had a slight wobble yesterday as the reality that the end of easy money may be drawing to close hit home. Like its British cousin, the greenback has been trading in a tight range as it awaits this evening’s confirmation that the Federal Reserve will now start tapering its monthly bond purchases by approximately $15bn.
During the day, before Jerome Powell takes to the podium at the Fed’s press conference, the first of this week’s employment data is released when ADP publish their predominantly white-collar labour report. Markit and ISM are also scheduled to release Purchasing Managers Indexes for the Service sector, but they are unlikely to shake the markets with such an important event later.