Yesterday’s economic docket was yet again relatively light. However, we did have UK Prime Minister David Cameron’s EU pitch yesterday morning to entertain markets. Cameron set out his demands for negotiations with the EU ahead of an in-out referendum on Britain’s membership of the union held before the end of 2017. Cameron’s objectives include restricting EU migrants access to work benefits, exempting Britain from the “ever closer union”, boosting competitiveness by reducing red tape and protection of the single market for Britain and other non-Euro countries.
Meanwhile, lowflation in China continued yesterday, signalling that more easing from the People Bank of China is on the horizon. Consumer inflation failed to meet expectations due to a large decline in food prices. The poor inflation reading, combined with the trade drop that was announced on Sunday has opened the door to additional stimulus from the PBOC.
There was another early morning release from China with the industrial production figure. Although the forecast is for production to increase to 5.8%, the reading disappointed and dropped to 5.6% growing at its weakest pace for six months. This again points to further warnings that a slowdown is still ringing true, adding further to the concerns of a global economic outlook. From the UK the release of the unemployment rate is expected to remain sticky at 5.4%, along with the release of the claimant count which is expected to drop to 1.6K. The head of the BoE Mark Carney, speaks at a press conference at 11.30am about the inflation report. Volatility will be seen here for the Pound, as markets gain further insight into when a rate rise may be on the cards for the UK.