Daily Market Report 13/12/2013


No information was out of the UK yesterday but interesting to note that the stock market in the UK is not performing well at the moment, set for its worst week on week run since 2008. This is all on the back of fears that the Federal Reserve will scale is quantitative easing (QE) program. Last time there was talk of the Fed scaling back its QE program, stock markets didn’t react as negatively as this, potentially indicating there is real concern that the Fed could scale back QE.


The Australian dollar weakened off significantly at around 2pm yesterday. The main reason for this is that the RBA Governor, Glenn Stevens surprised the markets with a very negative tone. He said the economy will probably not be influenced by further interest rate cuts. He thinks the economy would fare much better if AUD/USD traded closer to $0.85.

GBPAUD climbed over 2 cents off the back of the announcement. 


A lot of information out from the US yesterday. The most notable being retail sales which came in 0.7% month on month, compared with a forecast of 0.6%, showing consumer spending is continuing to increase in America.

Continuing jobless claims showed an increase from 2.75m to 2.791m, so job figures were not as good as last weeks.

However investors brushed off the job data, focusing on the figure from the retail sector, buying the US dollar causing it to strengthen against the pound by approximately 0.5%.

Also in the US, the Republicans yesterday passed a two-year budget plan extending government spending into 2015 removing the threat of another shutdown before next year’s elections. It still has to pass through Senate before it is signed into law, but nonetheless it does appear that another hurdle has been passed to enable the Fed to taper its QE program.


Figures out from Eurozone yesterday showed that inflation in Italy rose more than expected from 0.6% to 0.7%. Industrial production for the Eurozone as a whole fell by 1.1% in October instead of rising by 0.3%.


Bank of England policy maker Spencer Dale is scheduled to talk at a Confederation of British Industry even in Essex today, employment change data from the Eurozone is also scheduled for release and in the afternoon, markets will be focusing on producer price inflation out from the US.

Key Announcements:

10.00am – EUR – Employment Change (QoQ): Expected to improve from -0.1% to 0.0%.

12.30pm – GBP – MPC Member Spencer Dale Speech.

13.30pm – USD – Producer Price Index (MoM): Expected to improve from -0.2% to 0.0%.