Market Overview
Investors endured mixed sessions both on Wall Street and then in Asia overnight after disappointing US housing data and then news that the People’s Bank of China chose to drain $8bn of liquidity from the economy. The slight strengthening of the yen induced some profit taking in the Nikkei which had been so strong in the previous session, but generally today was a mixed day for Asian equities.Monetary policy comes back into focus today as the meeting minutes for both the Bank of England (at 09:30GMT) and the Federal Reserve (at 19:00GMT) are released. With both central banks needing to tweak their respective forward guidance recently the minutes will be interesting to see whether they can add more flesh to the bones. This could be a particularly volatile day therefore for GBP/USD.
In addition to this there is a look at UK unemployment (09:30GMT) whose importance has been diminished slightly following Mark Carney’s announcement that the rate would not be tied to the Bank of England’s forward guidance. The US also has housing starts and building permits (both at 13:30GMT). Dollar bulls would hope that recent signs of housing data beginning to deteriorate do not continue.
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