The focus this week will surround the Federal Reserve, where the markets will be searching for an indication on whether the Central Bank will raise interest rates next month. We may see a repeat of September last year, when the expected Fed rate hike, never came that month. This theme is likely to continue this week, with FOMC Chair, Yellen speaking on Friday.
Yesterday, a raft of Eurozone PMI data was released. Although the powerhouse Germany managed to release improved figures it wasn’t enough to boost the Eurozone as a whole. The Eurozone registered a poor Manufacturing PMI figure of 51.5, whilst services just missed economists’ consensus at 53.1. Although both readings posted above 50, indicating expansion in this sector.
There will be several high tier data releases today, mainly from the UK and Eurozone. Firstly, the German ZEW Economic Sentiment is scheduled to hit the wires. Following this, the ZEW is forecast to increase from 11.1 to 12.1. Germany will release the final reading for Q1 GDP which is expected to increase to 0.7%. Also this morning, the UK releases their public sector borrowing figures, set to improve on last quarter’s reading. The inflation report hearings from the UK will also take center stage with Governor Mark Carney and other MPC members set to testify on inflation and the current economic outlook.