Daily Market Report 20/11/2013


In the Eurozone, investor confidence in Germany has hit a four year high to 54.60, according to the monthly ZEW index. It found that analysts and business people in the Eurozone’s largest economy are optimistic about their countries prospects, partly due to a better economic outlook in the euro area. The recent 0.25% in interest rates will go a long way to stimulate demand in the EU Economy and improve business optimism

European car sales were up 4.7% in October largely driven by a 34% increase year on year in Spain due to a €1,000 government subsidy per new cars purchased. 

Producer price index from Germany has put the euro under pressure in early trade this morning with the euro down by 0.2% against the pound and the US dollar.


Yesterday the OECD has cut its forecast for global economic growth in 2014 to 3.6%, down from 4%. Advising that global economic conditions are still vulnerable and the outlook for emerging markets is deteriorating.

However the OECD now forecasts the UK economy will grow by 2.4% in 2014. In May it had forecast 1.5%. Advising that stronger investment and household spending will drive economic growth

UK car sales were also up 4.0% largely due to cheap financing deals on new cars.


Chinas central bank will end its normal intervention in the currency market and Borden the Yuan’s daily trading limit. Currently limits a daily rate move to no more than 1% of the fixing level it sets for the day. They will increase the role of market exchange rates and the central bank will eventually exit from intervention. However the Peoples Bank of China did not give a timeframe on these reforms.


Fed Chairman, Ben Bernanke echoed comments made by Janet Yellen and William Dudley last night by stating that the Fed remains highly accommodative with its monetary policy and that interest rates in the US will not be raised until quantitative easing ends. The US dollar came under pressure following these comments.


We have the Bank of England Minutes and the BoE voting results. The voting results are unlikely to surprise markets but comments and discussion on the decision to hold interest rates could shed some light on the direction of the pound and their outlook for the UK economy and unemployment

We could see some dollar weakness tomorrow as US inflation year on year is expected to fall from 1.2% to 1.0% and retail sales are expected to be soft for the month of October. Keeping in mind that these figures were derived during the 17 day government shutdown in October and could be disappoint markets.

The FOMC is releasing the minutes of its meeting where the Feds outlook on economic growth and its outlook for tapering its bond purchasing scheme that has been used to help stimulate the US economy. It is largely expected by economist that this tapering will not occur until March 19 meeting.

Key Announcements:

9.30am – GBP – BoE Minutes.

10.00am – CHF – ZEW Survey Expectations (Nov): Expected to increase to 30.

12.00pm – USD – MBA Mortgage Applications (Nov 15): Previously showed a fall of 0.5%.

13.30pm – USD – Consumer Price Index (Oct): Expected to fall to 1% year on year.

13.30pm – USD – Retail Sales (Oct): Expected to increase marginally by 0.1%.

15.00pm – USD – Existing Home Sales Change (Oct): Expected to fall by 2.6%.

19.00pm – USD – FOMC Minutes.