Yesterday, the main news came from another FOMC member who added to this week’s hawkish Fed comments. Federal Reserve Bank of Chicago President, Charles Evans, said he expects the central bank to raise interest rates in December. Also yesterday, the rumour mill was spinning as markets began to speculate that the ECB would consider ‘tapering’ bond purchases by €10 billion a month at some point next year.
The economic calendar was jam packed with high tier data yesterday. Firstly, UK Services PMI posted an improved figure of 52.6, continuing the good run of post Brexit data from the UK. In the afternoon, markets were treated to their first insight into Friday’s all important Non-Farm payroll figure as the ADP was released. ADP registered at 154k, slightly worse than the economists’ consensus. Finally, US ISM Non-Manufacturing PMI registered at 57.1.
Today there will be a very light data calendar, as the market takes a breather before a busy Friday. There will be no major releases from the UK, but German Construction PMI and Factory Orders will be the main releases from Europe. The German data will be closely watched to see whether the European powerhouse of growth continues to slow. The US initial jobless claims will be the highlight of the afternoon.