Daily Market Report - 08/09/2014

The pound has slumped to a 10-month low after the yes campaign took the lead in the opinion polls just 10 days before the Scottish independence vote. Westminster leaders will on Monday scramble to agree an offer of more powers to Scotland if it remains within the union in an effort to prevent a yes vote in next week's referendum.

The surge of support for independence also sent jitters through the stock market, as shares in companies with large Scottish interest suffered sharp falls in early trading.

Mario Draghi signalled last week that the ECB will inject  700 billion euros ($906 billion) of stimulus for the  struggling European  economy and left a fight with Germany over sovereign-bond purchases for another day. Pledging to “significantly steer” the European Central Bank’s balance sheet back toward the 2.7 trillion euros of early 2012 from 2 trillion euros now. 

The ECB president announced a final round of interest-rate cuts and a plan to buy privately owned securities. His mission is to revive inflation in the 18-nation euro area. 

With euro-area inflation languishing at 0.3 percent last month, a fraction of the ECB’s 2 percent goal, and Draghi saying price expectations are worsening, policy makers unexpectedly cut interest rates. The benchmark and deposit rates were reduced by 10 basis points to 0.05 percent and minus 0.2 percent, respectively. 

American employers hired fewer workers than forecast in August and the jobless rate dropped because people left the workforce. Bolstering those on the Federal Reserve who want to be more cautious when removing monetary stimulus. The 142,000 advance in payrolls was smallest this year and lower than the most pessimistic estimate from economists after a revised 212,000 gain in July.

The unemployment rate fell to 6.1 percent last month from 6.2 percent, reflecting a drop in joblessness among teenagers. Employers who boosted head counts in the first half of the year may be more restrained in their hiring as they await even faster economic growth.

Fed Chair Janet Yellen will leverage on the report to help discern the extent of slack in the labour market as the fed pulls  back record monetary stimulus, while keeping interest rates low at the same time. 

Key Announcements: 

09:30 BST- EUR- Sentix Investor Confidence expected to be lower at 2.0

20:00 BST- USD- Consumer credit change (July) increase to 17.35B from 17.26B 

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