Daily Market Report 23/10/12

Yesterday, despite some minor moves, trading remained fairly subdued for the euro, dollar and sterling, whilst the yen continued its slide against its peers.

As belief builds that the Bank of Japan will increase its stimulus, investors are moving elsewhere to seek greater returns, a welcomed effect for the ‘Rising Sun’. Having recently reported that exports for the year had dropped 10.3%, the most since the disastrous earthquake, a weakening yen will make Japanese exports more enticing.

With very little data released yesterday, there were few major moves. Sterling continued its poor performance, dropping low enough to reach a 5½-month trough, also slightly falling against the dollar. Bets that the Bank of England may join Japan by increasing its stimulus helped to contribute to the decline.

The euro’s return to strength was aided in part by Rajoy’s Galicia regional election victory, but the seemingly perpetual timescale of Spain’s bailout saga limited the extent of gains.

Another fairly quiet day for news may leave investors preparing for the announcement of the UK’s GDP figure to be released on Thursday. An expected increase to 0.6%, analysts are optimistic that the economy’s recovery could start to gain motion. Though if disappointing figures are released, further Bank of England stimulus would be foreseeable.


Key Announcements Today:
  • Overnight – USD – Final Presidential Debate
  • 09.30am – GBP – BBA Mortgage Approvals: slight increase expected to 30.9k
  • 13.30pm – CAD – Retail Sales
  • 14.00pm – CAD – BOC Rate Statement
  • 18.00pm – GBP – BOE Governor Mervyn King to speak

See previous Daily Market Reports