UK services PMI dominated yesterday’s morning session before Janet Yellen addressed the markets and the US released its ISM non-manufacturing figure in the afternoon. Firstly, UK services PMI gave the Pound an early boost as the slightly better than expected reading signalled stronger growth in the UK. The UK’s largest sector; the tertiary sector picked up due to the stronger job creation, a rise in business activity and sales from the Rugby World Cup. Services posted a better than expected 54.9 against the previous 53.3.
Janet Yellen spoke yesterday afternoon before the House Financial Services Committee in Washington DC. Yellen addressed the markets in a surprisingly hawkish tone. She went on to suggest that a December rate lift-off is a live possibility depending on data and that the US economy is performing well. US ISM non-manufacturing was released simultaneously and posted a three month high of 59.1, adding to yesterday’s strong Dollar news. After yesterday’s bullish and hawkish news economists are now putting the probability of a December Fed rate hike at 60% as opposed to 50% at the start of the day.
Super Thursday lands on the BoE calendar, which results in the release of the BoE inflation report, the rate decision and BoE minutes. This will be key in deciphering future policy action from the UK. Last week we saw the expectations brought forward from Q4 2016 to Q3 2016 after the FOMC comments. Looking at the data front, German factory orders and US weekly jobless claims are due to hit the wires.