Yesterday’s markets

2nd December 2015

• GBP Bank Stress Test Results
• GBP BOE Financial Stability Report
• GBP BOE Gov Carney Speaks
• German Unemployment Change: -13K
• GBP Manufacturing PMI: 52.7
• EUR Unemployment Rate: 10.7%
• USD ISM Manufacturing PMI: 48.6
• USD FOMC Member Evans Speaks
• RBA Gov Stevens Speaks
• AUD GDP q/q: 0.9%

Results of the Bank of England stress tests were released yesterday. The stress test is undertaken by several banks and building societies in an effort to determine the banks’ stability and capital reserve adequacy. Royal Bank of Scotland and Standard Chartered, two UK based banks both narrowly passed the tests after taking steps to improve their capital ratios during the testing process. The Bank of England said yesterday that UK banks’ capital requirements would not continue to rise, signaling an end to the post-credit crisis era of increased caution.

There was a raft of data released to and from the pond yesterday. In the morning the UK released a poor manufacturing PMI number. Manufacturing PMI fell to a worse than expected 52.7 after the previous bullish 55.2. Eurozone unemployment was announced shortly after, where the figure fell to a low of 10.7%, its lowest reading since March 2012.  From the US, we had the release of ISM manufacturing PMI. ISM manufacturing registered a 48.6, continuing this week’s poor US data trend and contracting for the first time since June 2013. 

Today’s markets

1st December 2015

• EUR Spanish Unemployment Change
• GBP Construction PMI
• EUR CPI Flash Estimate y/y
• EUR Core CPI Flash Estimate y/y
• USD FOMC Member Lockhart Speaks
• USD ADP Non-Farm Employment Change
• USD Revised Non-Farm Productivity q/q
• USD Crude Oil Inventories
• USD Fed Chair Yellen Speaks 
• USD FOMC Member Williams Speaks
• AUD Trade Balance

Inflation gauge from the single currency zone will be watched by markets today as the year on year figure is expected to slightly increase to 0.2%. This leads into Thursday’s Central bank meeting where inflation will continue to be the ECB’s main concern and possibly prompt further action from Draghi to tackle this. The US markets get an insight into Fridays all important Non-Farm employment figure, as the ADP employment reading is released.