It was a relatively light economic docket yesterday with only two pieces of high tier data released. UK Manufacturing Production and Industrial Production were both disappointing by failing to meet the economists’ consensus. Manufacturing Production registered a -0.9% increase, whilst Industrial Production in the UK posted a -1.3% drop, its worst figure since November 2012. The unexpected decline sunk the Pound against the majority of its counterparties yesterday as the poor reading suggested a slowdown in the UK’s secondary sector.
The Euro remained resilient yesterday as stock markets and bonds continued to surge on Italian bank rescue hopes. A recent article suggested that the Italian government could take another £1.68BN stake in Italy’s oldest bank. Italian newspaper, La Stampa, stated that the country could ask for a £12.63BN European Stability Mechanism loan, a loan which should settle investor’s nerves surrounding Italy and the Eurozone. However, these continue to be rumours as markets eagerly await some solid evidence.
Today sees a key piece of secondary sector data from the UK, followed by Crude Oil Inventories this afternoon. Manufacturing Production this morning is forecast to decline from last month’s reading to 0.2%, whilst Industrial Production is expected to bounce back from negative territory. Last week’s OPEC meeting in Vienna has put this afternoon’s Crude Oil Inventories reading into the spotlight. Negotiations led to members freezing Production at 32.5m barrels per day, which was toward the lower end of economists’ forecast last week.