UK Inflation Report, Europe dominate news today

February 21, 2017

Quite an active day for markets with a number of announcements from Europe as well as crucial UK inflation data.

The event most likely to cause markets to move later today is the Inflation Report Hearings out of the UK. This is an event where Bank of England Governor Mark Carney, as well as members of the Monetary Policy Committee (MPC) testify before the Parliament’s Treasury Committee. This is expected to be a few hours in length and can cause market volatility throughout its duration. Up for discussion is the all-important inflation and economic outlook for the UK. The inflation data is particularly vital given the UK’s decision to leave the EU. This has caused a weakening of the pound, which has therefore caused a pick-up in inflation. The key for Central bank officials is to keep inflation under control, while at the same time, not send the economy into a recession.

Europe has a host of data set for release later today. This includes: Swiss Trade Balance, French Final CPI, European/German & French Flash Manufacturing PMI’s and European/German & French Flash Services PMI’s. Trade balance data shows the difference in value between imported and exported goods. The CPI data is important in determining inflation for France while the Manufacturing & Services PMI data is crucial in gauging the strength of both sectors in their respective economies.

Elsewhere, the UK is also publishing Public Sector Net Borrowing data, the US is reporting its Flash Services & Manufacturing PMI’s, while Australia is releasing its CB (Conference Board) Leading Index. Finally, FOMC (US Fed Reserve) Members Neel Kashkari and Patrick Harker are due to speak.