Daily Market Report - 03/10/2014

The European Central Bank kept interest rates unchanged at record lows, with the main refinancing rate at 0.05. The deposit rate and the marginal lending rate remained at -0.2 % and -0.3 %, respectively.

The European Central bank said its plan to purchase private debt would begin over the next three months and would last for two years. Draghi stated that riskier assets are eligible for purchase including Greek and Cypriot assets that are classified as Junk.  The Euro jumped to half a cent against the dollar on the news, with a lack of confidence from investors that the stimulus program will not be large enough. 

Strong growth was maintained across the UK construction sector in September, supported by sharp rises in housing, commercial and civil engineering activity. With the overall performance of the construction sector was close to its strongest since the summer of 2007. 

Latest data indicated that new order growth and job creation both eased to the lowest level for four months. Supply chain pressures have resulted in a steep increase in input costs, as well as further delays in the receipt of construction materials.

UK Construction PMI came in at 64.2 in September, up fractionally from 64.0 in August. The latest reading signalled a sharp expansion of overall construction output that was the steepest since January and the second fastest seen over the past seven years.

The number of Americans filing applications for unemployment benefits unexpectedly fell last week; a sign the job market is sustaining progress. Jobless claims dropped by 8,000 to 287,000 in the week ended September 27th, from a revised 295,000 in the prior period.

Firings are hovering close to decade lows as employers benefiting from rising demand to retain staff, laying the ground for more hiring and wage gains. A report today is projected to show employers added to payrolls in September and the jobless rate held at a six-year low.

New orders for U.S. factory goods posted their biggest decline on record in August, payback for an aircraft-driven jump a month earlier. The Commerce Department said on Thursday new orders for manufactured goods dropped 10.1 percent. That was the largest drop in records going back to 1992. Stripping out transportation orders which were depressed by a plunge in the volatile aircraft component, new orders were down a more modest 0.1 percent.

Key Announcements
10:30 BST: GBP - Services PMI expected to rise 59.1
11:00 BST: EUR - Retail Sales m/m – Forecast to rise at 0.1%      
14:30 BST : USD - Non-Farm Employment Change – Forecast 216K
14:30 BST : USD - Unemployment Rate   Expected to be 6.1
16:00 BST: USD - ISM Non-Manufacturing PMI expected to be 58.5

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