Daily Market Report 22/10/2013

Markets were fairly lacklustre yesterday and volatility was minimal with little data to drive currencies in any clear direction – investors appear to be waiting on the side lines until the release of the overdue data from the US.

There were two things to note yesterday. Firstly, The US National Association of Realtors confirmed that existing home sales fell by 1.9% in September to 5.29mln units from 5.39mln in August. Secondly, Rightmove revealed that house prices in London rose by 10% in October from the previous month and across England and Wales house prices rose by a more modest 2.8%.

Today UK public sector borrowing costs are due for release, with expectations for Britain’s budget deficit to have narrowed in September

With very little else on the European calendar this morning, investors will be keeping an eye on the delayed US non-farm payroll and unemployment rate figures for the month of September. Expectations are for an extra 180,000 jobs to have been added with the unemployment rate sticking at 7.3%. A good non-farm payroll figure may provide the US dollar some relief and we may see investors use the data as a reason to take profits on the recent weakness of the US dollar.

If however we see a disappointing figure released then we could a larger negative reaction on the US dollar.

Key Announcements:

9.30am – GBP – Public Sector Borrowing (Sep): The budget deficit is set to fall to £10.4bln.

13.30pm – CAD – Retail Sales (Aug): Expected to have risen only by 0.3%.

13.30pm – USD – Nonfarm Payrolls (Sep): An extra 180,000 jobs are forecasted to have added.

13.30pm – USD – Unemployment Rate (Sep): Expected to remain at 4 ½ year low of 7.3%.

15.00pm – USD – Construction Spending: Previously increased by 0.6%.