Data released overnight showed China’s services sector slowed in July. China’s Caixin Services PMI dropped to 51.1 in July from 51.6 in June and also undershooting forecast at 51.9, signaling easing in new business growth which implies to softening in a key part of China’s economy.

Australian trade balance data showed trade surplus narrowed significantly in June to 0.85 billion AUD, compared to May’s downward revised surplus at 2.02 billion and forecast of 1.8 billion surplus.

The Australian dollar fell further in Asia after disappointing data.

Series of Services PMI data from the Eurozone countries are in focus in the European session, with forecasts showing unchanged figures from the previous month.

UK Services PMI is expected to tick higher, according to the forecast for 53.6 in July vs 53.4 in June, and release will be closely watched for further signals of UK economy slowdown, following decline in UK Construction PMI yesterday. Data is due at 08:30 GMT.

Eurozone’s Retail Sales are due at 09:00 GMT with expectations for m/m release to drop to 0.1% in June from 0.4% in May, while annualized number is expected to remain unchanged at 2.6% in June.

Bank of England’s rate decision is the key event on Thursday. Britain’s central bank will announce its rate decision at 11:00 GMT with subsequent press conference of BoE’s Governor Carney and release of Inflation Report.

The central bank is expected to keep interest rate unchanged at 0.25% with 6-2 vote in favor of unchanged policy expected.

Despite recent rise in inflation in the UK that turned BoE’s tone more hawkish, there are no stronger expectations that the central bank would hike rates soon. Higher inflation is seen temporary and triggered by weak GDP on Brexit impact. Other key factors that may influence such decision are slowdown in GDP growth which stays below central bank’s expectations, weak wage growth as well as political uncertainty.

American session starts with release of weekly jobless claims at 12:30 GMT. Forecast for today stands at 242K, slightly below 244K last week.
US ISM Non-Manufacturing PMI is due at 14:00 GMT and forecasted at 57.0, declining from 57.4 in June, following recent drop in Manufacturing sector.