Today’s market schedule is significantly influenced by Purchasing Managers Index (PMI) announcements and comments by Bank of England members.
PMI data in France, Germany and the Eurozone are expected to show signs of expansion, boosted by the European Central Bank’s (ECB) decision to cut interest rates, which has increased consumer spending.
However, it is anticipated that the UK PMI for the manufacturing and services sectors would both slightly decrease, even if they are both still over the 50 mark.
Ahead of the Bank of England’s monetary policy announcement in November, markets will be closely watching Governor Bailey’s speech. By May of next year, analysts anticipate that the Bank will lower the headline rate to 3.75 percent.
Governor Bailey has recently voiced that the Bank needs to have a more aggressive stance on rate cuts – this factored with a significant fall in CPI inflation has raised the likelihood of a rate cut in November.
GBPEUR has remained stable trading within a 60-pip range over the past week, while GBPUSD has fallen 3 percent over the last month, falling from its multi-year highs. The US dollar is still enjoying strong support with increasing confidence in the strength of the US economy, as markets await the US election.
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