– USD weakened, Asian equities mixed
– New Zealand’s retail sales unexpectedly fell in 3Q
– BoE inflation report, and Fed FOMC minutes will be released today
– Italy to sell 3yr, 11yr and 17yr bonds
What to watch for today
UK: Inflation update. The Bank of England’s inflation report could leave the door open to more QE, if needed, as leading indicators remain weak and risks from euro zone are elevated. Such an outcome could be more dovish than expected with a near-term risk to GBP, but as more QE would entail a scenario where EUR is also under pressure, we remain bullish on GBP vs. EUR. Among other topics, the bank is likely to discuss the impact of the Funding for Lending scheme, revise near-term inflation forecasts higher but probably change little in the longer-term outlook. Separately, October jobless claims are likely to be flat, following a 32k fall over the past three months.
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