ECB Minutes to signal possible rate hike in 2018?

• UK business investment forecast to remain unchanged
• ECB minutes in focus
• CAD investors await retail figures

UK Business investment expected to hold steady

The Office for National Statistics (ONS) will publish the UK’s latest business investment figures this morning.

Forecasts suggest that the latest report will show investment growth remained at 0.5% in the fourth quarter, likely leading to limited movement in GBP.

This would result in the third consecutive quarter in which investment has held at 0.5%, and is likely to have been held back by Brexit uncertainty.

While Bank of England (BoE) Governor, Mark Carney predicts investment will rally over the coming year, he stated that this would be reliant upon progress being made in Brexit talks. 

ECB to publish minutes from January policy meeting

The euro is likely to see some movement later this afternoon as the European Central Bank (ECB) releases the minutes from its most recent policy meeting.

The ECB voted in January to leave its monetary policy unchanged, with President Mario Draghi signaling that a rate hike in 2018 was unlikely.

However this has done little to quell speculation that the ECB may be becoming increasingly hawkish, and markets will likely scour the minutes for any hints that policymakers may be in favor of further monetary tightening this year.

Observers suggest that the ECB could be willing to revise its policy plans in its March meeting after receiving the most up-to-date Eurozone assessment.

Retail sales figures may bolster CAD

Canada will publish its latest retail sales figures later today, with investors keen to see how consumer spending is faring after two rate hikes from the Bank of Canada (BoC) last year.

While the majority of economists forecast retail sales growth will have held at 0.2% in December, some of the more optimistic analysts suggest that sales may have risen by 0.4%.

Such a jump would likely result in the Canadian dollar ticking slightly higher this afternoon.

However a boost in sales in December would fly in the face of global trends, with most other countries experiencing the opposite as consumer chose to spend big in November instead. 

Upcoming Data

Thursday, 22 February, 2018
09:30                     GBP Business Investment
12:30                     EUR ECB Minutes
13:30                     CAD Retail Sales