In comparison to the remainder of this week, Monday was devoid of any top tier data. In spite of the lack of data, the Pound began the week well, gaining ground against the US Dollar and Euro. The data release came at the end of the day, with planned speeches by US Fed Member Brainard and Australian RBA Assistant Governor Kent, as well as the release of Chinese Industrial Production. The Chinese data was moderately positive, expanding fractionally more than expected to 6.3%. The good news in the Pacific continued as RBA Assistant Governor Kent, delivered an upbeat speech in Sydney early this morning. Dr Kent repeatedly stated that recent economic growth had been stronger than the Reserve Bank had anticipated. Over in the United States, the news from the Federal Reserve wasn’t particularly positive, with expectations around a possible US rate hike being trimmed by Fed Governor Lael Brainard. On Monday, she warned against moving too quickly on rate hikes. Her comments followed a flurry of Fed speakers, who in recent days have offered divergent views on the outlook for Monetary Policy.
Today, the pace in the market will quicken with a number of key readings due for release from Europe and the UK. Of the data releases, the most significant is UK Inflation, which is due to be released at 09.30am (BST). For the past two months, inflation has outperformed the market’s expectations, picking up briskly in the post-Brexit UK economy. It is expected that the pace of inflation will expand once again from 0.6% to 0.7%. With inflation being stagnant for so long, a rise in inflation is an added element for the Bank of England to consider ahead of their Monetary Policy meeting later this week. Also of significance today, ECB President Draghi’s speech at the 2016 Alcide De Gasperi Award Ceremony in Trento and the release of the German ZEW Economic Sentiment figure.