European Open: another Super Thursday

Asian equities were mixed overnight, after Fed Chairman Yellen (& Dudley) renewed the statement that “December is a live possibility” for a rate hike. This put a stopper in the equity rally (as higher rates mean lower present value of discounted dividends) and halted commodities as well via USD appreciation. The monetary policy divergence trade is back with a blast.
Looking ahead: it’s another Super Thursday for the GBP, with the November Inflation Report being released at the same time as the MPC decision and minutes. All this will come at 12.00 GMT, followed by Governor Carney’s press conference at 12.45pm GMT. The market is expecting no change on the 8-1 split and 0.5%. The Inflation Report is likely to show CPI overshooting the 2% target at the end of the forecast horizon so if it doesn’t, expect some decent GBP weakness. I prefer to play any Gbp strength vs. Euro still, and any new weakness vs. USD.
Elsewhere, at 13:30 GMT we have Dudley, Lagarde &  Fischer speaking on banking culture. At 15:00  GMT we have Canadian Ivey PMI (expected 54.0 vs. 53.7 prior) and finally at 18:30 GMT Atlanta Fed President Lockhart speaks.
Charts for Today:

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