Yesterday was another day of wild swings in global stock markets. In Europe, the indices managed to lose the previous day’s gains as western stock markets continue to be heavily influenced by China’s stock markets which saw early gains eroded to end with yet more losses.

The massive reversal was inspired by the prospect that US interest rates will remain on hold for the foreseeable future, with New York Federal Reserve Bank chief William Dudley suggesting that there is now only a very slim chance of US rates rising in September. Any rise this year would reflect strength in the US economy and is very much data dependant and a further sign of US economic strength came in the form of a better than expected durable goods order release covering the month of July. The durable goods number heightened expectations that tomorrow’s US Q2 GDP release will confirm the US economy growing at a rate of 3.2% rather than the previous reading of 2.3% on an annualised basis.

In the UK, Sterling has given up more of its recent gains as the market turmoil in China reduced the prospect of the Bank of England’s MPC moving to raise rates this year.

What a difference a few weeks can make. Not that long ago expectations of an upwards rate movement by the BoE had driven a scramble by UK homeowners to re-mortgage during June with numbers up by 30% on the same month a year ago. Mortgage approvals for June were also up 11% year on year suggesting that the UK housing market is clearly buoyant.

This evening’s GfK consumer confidence reading is expected to climb further into positive territory and should help reaffirm the UK’s economic health continues to improve.