Daily Market Report 19/11/2013

GBP

Quiet in the UK yesterday. Only figures released were house price figures which showed a decline of 2.4 % as opposed to a gain of 2.8% the previous month; the pound declined against most of its peers as a result.

EUR

Main figures out yesterday from the Eurozone were trade balance figures which came in at €13.1bn which is almost double the previous month and well above the expected €10bn. The EU is obviously a large exporter of goods and services, the number of goods and services exported has increased substantially.

This saw GBP/EUR drop off yesterday reinforces our thoughts yesterday that we could see a bit of euro strength this week.

USD

Figures out from US included Net Long Term Flows, which shows of the in and out flows of financial resources in the US. This has improved from –US$9.8bn in the previous month to a gain of US$25.5bn this month. This is particularly important as it shows the US could be cutting its trade deficit.

Last night Federal Reserve member William Dudley reiterated the Fed’s stance that economic growth isn’t sufficient yet to start tapering stimulus. However, he believes that growth will pick up in 2014 and 2015. As growth improves then conditions in the job market should also improve.

AUD

The AUD gained yesterday against most of its major peers yesterday. This is on the back of Chinese Economic reforms which have improved the outlook for Australian exports to China.

Also overnight in the Reserve Bank of Australia’s minutes from their latest policy meeting, the central bank confirmed that recent interest rate cuts were working and at this time they feel prudent to hold the interest rate at 2.5% but reaffirmed that they would be in a position to cut the rate should they feel it was required.

The Australian dollar strengthened by an additional 0.6% against the pound as a result.

Today

We have economic sentiment survey data out from Germany and the Eurozone as a whole this morning with forecasts suggesting sentiment from both improving in November from October. As a result we would expect the euro to strengthen should the data come in line or beyond these expectations.

Later today we also have a speech by Fed Chairman Ben Bernanke at the National Economists Club in Washington, with expectations that he will reiterate the comments made by William Dudley that economic growth isn’t sufficient yet to taper stimulus.

Key Announcements:

10.00am – EUR – Eurozone ZEW Survey of Economic Sentiment (Nov): Expected to be higher at 63.1.

10.00am – EUR – German ZEW Survey of Economic Sentiment (Nov): Expected to be higher at 53.8.