esterday’s comments by FOMC members Evans, Rosengren and Kashkari was a tad dovish. The former, usually dovish, emphasised the country’s low GDP growth numbers and noted that a tightening of monetary policy in the coming months wouldn’t be desirable. Rosengren, on the other hand, said that the central bank’s targets are close to being met, but that any monetary tightening should be gradual and balanced. Kashkari also spoke but focused more on the divergence in unemployment rates between racial groups the US. Nonetheless, he suggested he would want to see core inflation rise before a rate hike.

Inflation in the Eurozone was once again a disappointment. Preliminary data, for both core CPI and regular CPI, was worse than expected YoY, with 0.8% and 0.2% growth respectively.

Major currencies in detail:

GBP

Sterling ended the London session 0.1% higher against the US Dollar on Wednesday.

The UK’s GfK Consumer Confidence survey did slightly better than expected in August and achieved the best score since the Brexit vote. The Nationwide House Price Index also exceeded expectations YoY and finished at 5.6%, up from 5.2% last month.

The manufacturing PMI for August, released this morning, is the only important data point from the UK today. Any surprises might influence the course of Sterling.

EUR

The Euro climbed 0.1% against the US Dollar yesterday.

European unemployment statistics mostly met expectations yesterday. In Germany, the biggest European economy, unemployment in August was as low as 6.1%. The composite unemployment indicator for the Eurozone did a bit worse than expected but remained stable at 10.1%.

Inflation in France came in at 0.3% for August, as opposed to the 0.4% expected, as European prices struggle to reach the ECB’s targets.

Similar to the UK, this morning’s manufacturing PMI is the most important figure to be released in the European Union today. We’re also expecting commentary by ECB official Ewald Nowotny at 17:00 UK time.

USD

The Dollar finished yesterday unchanged against its major peers, still remaining around a three week high.

Yesterday’s data was interesting. Pending Home Sales Index for July exceeded expectations and showed a 1.3% increase versus the previous month. The Chicago PMI for August, which ended at 51.5, was 2.5 lower than the consensus and disappointed investors.

The ADP Nonfarm Employment number was a positive sign for the US economy, exceeding expectations with 177,000 jobs added to the private sector in August. It whets the appetite for Friday’s US labour report, but it has to be noted that this indicator is not a good indicator of the nonfarm payrolls figure. Nonetheless tomorrow’s US labour report is the most important economic release before the next Fed meeting and, if the positive trend continues, it should help the committee agree on the next rate hike.

Today, among the pile of data releases, the most important from the US include: Initial Jobless Claims at 13:30 UK time and the Manufacturing PMIs at 15:00 UK time. There is also a speech from another Fed member that is worth noting; Mester is often perceived as a hawk.

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