US Futures are trading higher this morning as the stains of uncertainty which triggered due to the attacks in Paris are fading off. Wall Street turned around its last week losses with a sharp rebound yesterday on the back of some strength from the energy sector. However, crude oil is dropping again today and this may trigger profit taking in the energy sector later. The robust US economic readings remain the major focal point among traders as this will make the path of the rate hike much smoother.
The major element which matters the most for the Fed are the labour market and price stability with respect to inflation. We know that inflation will not be picking up that easily, but as long as sign posts are positive, the Fed will remain confident to lift the interest rate. Later on, we have the US CPI inflation data and the forecast this time is a little cheerful with a reading of 0.1% which comparatively is higher from previous reading of 0.0%. But, still we are well far off from the Fed target level of inflation. Most of the focus is usually paid towards the core price data as this strips most elements which are impacted by the sell off in oil. The expectations are that this number could swell to 1.9%.
Moreover, we also have the US industrial and manufacturing production data for the month of October. We do think that the activity could have picked up during the month of October and the official forecast is for a slight increase of 0.1%.
Back in Europe, easy jet has produced a big bang as their profit climbed by 18% to a new record. It was simply astonishing number for them and the elements which helped them the most was the recovery in Europe which boosted their demand. Hence the carrier wants to boost their capacity and they are still determined to heat up the price war- thanks to lower oil price. These days it is all about market share and the competition between Ryanair and easy jet is tremendously stiff.
The firm announced that their revenue was boosted to 4.68 billion pound, which was nearly 3.5% rise. Easy jet has also produced another stellar performance when you look at their pre tax margin which surged by 1.8%. The company has been fighting for its market share as we said above and the numbers of passengers clearly tell this story which spiked up by 6% to 68.6m.
As for Germany, we have the German ZEW economic sentiment data due at 10:00 AM GMT. The forecast is for 6.7%, which is very strong because previous reading was at 1.9. Perhaps, the sentiment that the ECB will add more stimulus is helping the German ZEW sentiment. But before that, we have the UK’s CPI y/y data will hit the tape at 09:30 GMT. The number is expected to remain unchanged from its previous reading of -0.1%.