The UK CBI industrial trends index strengthened to 26 for November from 9 the previous month, comfortably above consensus forecasts of 18 and the strongest reading since 1977. Exports posted their strongest reading since March 2019 and stock levels were very low while prices increased at the fastest rate since 1977 which will maintain underlying concerns over inflation pressures. Sterling was unable to secure a boost from the data and was also hurt by the strong dollar.
Bank of England MPC member Tenreyro stated that interest rates were likely to increase in the medium term, but she declined to put a more precise timeframe on the potential timing of an increase. She added that she would not comment on the specific potential for a hike in December or February, but was generally cautious.
The UK currency dipped to fresh 2021 lows against the dollar while the Euro held at the close. There were reservations surrounding Brexit developments with the two sides still seeing substantial differences over the Northern Ireland protocol, although there was also some positive rhetoric.
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The German IFO business confidence index declined to 96.5 for November from 97.7 the previous month and marginally below consensus forecasts. There was a limited decline in the current conditions index with a similar drop in the expectations index. The IFO commented that the recent drop in confidence is a cause for concern. It added that supply chain bottlenecks are placing companies under a lot of stress with no prospect of a short-term change and that the vast majority of companies want to raise prices. The Euro remained under pressure ahead of the New York open with further concerns over coronavirus developments
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21:00 EUR ECB’s President Lagarde speech
US initial jobless claims declined sharply to a 19-month low of 199,000 in the latest week from a revised 270,000 and well below consensus forecasts of 260,000. Durable goods orders declined 0.5% for October after a 0.4% retreat the previous month with a 0.5% increase in underlying orders.
San Francisco Fed President Daly stated that there was a case for accelerating the tapering of bond purchases, maintaining speculation that there would be a shift in the bank stance. The Euro attempted to recover, but remained firmly on the defensive amid dollar strength. Market conditions are liable to be subdued on Thursday with the US Thanksgiving Holiday and the Euro secured a slight recovery on Thursday.
Thanksgiving Holiday