Daily Market Report - 23/10/2014

The Bank of England voted 7:2 to hold interest rates unchanged at 0.5%. Some analysts are suggesting rates could remain at their current low of 0.5% well into 2015, or even into 2016 if the economy continues performing in the same way. The Bank of England painted a fairly bleak picture yesterday, suggesting that weaker growth and low inflation in the Eurozone has increased risks to the UK.

Pressures on the UK economy from the Eurozone and China were the main concerns of the Bank of England. They  also mentioned that average earnings still struggled to keep pace with the low level of inflation, so a rate hike is not justified said the Bank of England. They are only expecting a slight slowdown in the UK but  they believe  but there are no signs of the wider contagion to the UK that came in 2011/12. 

US consumer prices barely moved last month. This was mainly due to a decline in energy prices which cancelled out a minimal increase in food costs. Data from the US Bureau of Labour Statistics showed that the consumer price index moved up by just 0.1% in September. Energy prices fell 0.7%, while indices for food, alcohol and medical care slightly increased. This figure was was slightly better than expected and the dollar did strengthen yesterday after this news. 

Key Announcements:

09:00 EUR – German Markit Manufacturing PMI (Oct) expected to decrease to 49.9
09:00 EUR – German Markit Services PMI (Oct0 expected to decrease to 52
9:30 GBP – UK Retail Sales (Sept) expected to decrease 2.8%
13:30 USD  – Initial Jobless Claims expected to rise to 282k
13:30 USD – Continuing Jobless Claims expected to fall to 2.38M
14:45 USD – Markit Manufacturing PMI (Oct) expected to decrease to 57

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