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12 Feb 2014
European Open: BoE inflation report in focus
FXStreet (London) - The big jump in Chinese trade balance data helped to support risk overnight. China’s trade surplus jumped to USD31.9 in January, easing concerns over weakened Chinese demand as a result of tightening of conditions by Beijing.
Imports rose by 10 percent year-on-year to $175.27bn, led by crude oil, iron ore and copper.
Last month’s weak year-on-year trade balance numbers have been attributed to over-invoicing in 2012.
The positive news helped to lift Asian equities markets. The Nikkei gained 0.56 percent while the Hang Seng added 1.52 percent.
Eurozone industrial production numbers are expected to show a contraction in January after weaker than expected numbers from composite economies. Consensus expectations are for a 0.3 percent drop, after last month’s 1.8 percent gain, however there is potential for greater downside.
The biggest event of the day will be the Bank of England’s inflation report at 10:30 GMT. With the unemployment rate at 7.1 percent, a hair’s breadth from the 7.0 threshold set out below which Mark Carney would consider raising the BoE base rate, focus will be on the central bank’s policy after forward guidance. While Carney has reiterated that the 7 percent level constitutes a threshold and not a trigger and that he will not be moving rate hikes forward, it is unlikely that he will lower the threshold. Instead, it is likely that we will see focus move away from unemployment and to inflation, after the UK posted it’s first on-target inflation print of 2 percent last month.
St Louis Fed chairman Louis Bullard is set to speak today. However, given that he is not currently a voting member of the FOMC, it is unlikely that his words will move the market after yesterday’s testimony by Janet Yellen in from of the House Financial Services Committee.
Imports rose by 10 percent year-on-year to $175.27bn, led by crude oil, iron ore and copper.
Last month’s weak year-on-year trade balance numbers have been attributed to over-invoicing in 2012.
The positive news helped to lift Asian equities markets. The Nikkei gained 0.56 percent while the Hang Seng added 1.52 percent.
Eurozone industrial production numbers are expected to show a contraction in January after weaker than expected numbers from composite economies. Consensus expectations are for a 0.3 percent drop, after last month’s 1.8 percent gain, however there is potential for greater downside.
The biggest event of the day will be the Bank of England’s inflation report at 10:30 GMT. With the unemployment rate at 7.1 percent, a hair’s breadth from the 7.0 threshold set out below which Mark Carney would consider raising the BoE base rate, focus will be on the central bank’s policy after forward guidance. While Carney has reiterated that the 7 percent level constitutes a threshold and not a trigger and that he will not be moving rate hikes forward, it is unlikely that he will lower the threshold. Instead, it is likely that we will see focus move away from unemployment and to inflation, after the UK posted it’s first on-target inflation print of 2 percent last month.
St Louis Fed chairman Louis Bullard is set to speak today. However, given that he is not currently a voting member of the FOMC, it is unlikely that his words will move the market after yesterday’s testimony by Janet Yellen in from of the House Financial Services Committee.