Sterling extended gains on Wednesday, hitting a fresh four week high against the dollar and a nine day high against the euro after data showed industrial production rose above expectations. British industrial output rose to 0.4 percent month on month in November which was slightly higher than expected while Bank of England policy maker, Andrew Sentence, added further support by hinting that the Bank of England’s quantitative easing program could be at an end and it could be considering raising interest rates this year if inflation becomes a risk.
Over in the Euro Zone, French inflation figures were released higher than expected, to 1.0 percent year on year. Industrial orders released from Italy dropped 0.2% month on month but improve to -7.9% on the year. This gave the single currency a modicum of support after German GDP figures for 2009 disappointed. German CPI numbers and Euro Zone industrial output are up for release today. But in the main, investors will await today’s ECB rate announcement and its following press conference, after which attention will quickly shift to economic data out of the US.
Jobless claims, retail sales and business inventories are scheduled for release this afternoon. The jobless claim figures have been coming in under the 500k mark now for over a month which had led markets to expect an improvement in non-Farm payroll numbers for December. The weaker read of -85k is still weighing on the hearts of investors, as the outlook for a jobless recovery continues. But a continued drop in weekly jobless claims would continue to provide some degree of hope.
Retail sales figures are due for the month of December, which could see some skewing due to their seasonality. Markets widely expect to see consumer demand to remain in positive territory, but perhaps not as strong as the surprise 1.3% gain seen in the prior month. Lastly, the slower pace of winding down in business inventories has been contributing positively to growth data. A continuation of this trend will be hoped for in today’s release of business inventories.
