BOE’S MARK CARNEY HEADLINES SLOW CALENDAR DAY
Wednesday is expected to be another light day on the economic calendar, as a dearth of high-profile data keeps investors fixated on monetary policy.
Bank of England (BOE) Governor Mark Carney headlines the release schedule with a speech at 13:15 GMT. The Bank raised interest rates last month for the first time in over a decade in response to counteract the sharp rise in inflation. Policymakers have been keeping a close eye on the consumer price index (CPI) in the wake of Brexit. Following the November rate hike, the benchmark interest rate now stands at 0.5%, where it was before the EU referendum in June 2016.
It has been a big month for monetary policy after the US Federal Reserve raised interest rates for the third time this year. In doing so, the Fed maintained its outlook on three more rate increases in 2018. The Fed’s decision to lift rates was probably the last under the leadership of Chairwoman Janet Yellen. She will be replaced early next year by Jerome Powell.
In terms of economic data, the German government will report on producer inflation at 07:00 GMT. The producer price index (PPI) is forecast to rise 0.2% in November, following a 0.3% increase the month before. That translates into a year-over-year gain of 2.6%.
Two hours later, the European Central Bank (ECB) will report on regional current account balances. The euro-wide current account surplus stood at €37.8 billion in September, in seasonally adjusted terms. That figure is expected to drop to €33.4 billion in October.
Later in the morning, the Confederation of British Industry (CBI) will report the trades survey for the month of December.
Shifting gears to North America, the Canadian government will release its monthly wholesale sales report at 13:30 GMT. The monthly indicator is expected to show growth of 0.5%, partially offsetting the 1.2% drop in October.
The National Association of Realtors (NAR) will headline the US release schedule with its monthly report on existing home sales. The sale of previously-owned homes is forecast to rise 1% to a seasonally adjusted 5.52 million in November.
The British pound has stabilized below 1.3400 US, although recent movements in the dollar suggests a rebound may be in store. The GBP/USD has established a solid line of support around 1.3330.
Europe’s common currency has rebounded sharply this week. After bottoming in the mid-1.17 region on Monday, the EUR/USD has gained more than 100 pips. It currently sits right around 1.1845.
The USD/JPY is experiencing a relatively uneventful session, as the pair continues its long climb back toward 113.00. Current price action is just below that level, although analysts warn this pair could be rangebound for the foreseeable future.