Daily Market Report - 27/10/2015

The latest CBI Industrial Trends Survey found further falls in new orders were predicted over the coming quarter. Output was also expected to decline, the report revealed. CBI Scotland director Hugh Aitken said: "Manufacturers have been struggling with export demand for several months because of subdued global growth and the strong pound."

The survey contrasts the number of companies reporting improvements with those saying there are declines, providing an overall balance. Total new orders fell over the three months (balance of -18%), with both domestic new orders (-15%) and export new orders (-45%) contributing. It found confidence about the general business situation fell over the past three months and a deeper fall in optimism about export prospects was also reported.

The leading economic think-tank IFO said in its closely-watched business confidence survey that concerns about slowing growth in China, the Volkswagen pollution-cheating scam and the massive influx of mostly Syrian refugees in Europe had dented optimism only slightly this month.

Its headline index slipped to 108.2 points in October from 108.5 points in September, Ifo said in a statement, a much shallower drop than analysts had expected. The consensus was a reading of 107.9.

In other news, France believes the European Central Bank's monetary policy is appropriate and could only be loosened further with difficulty, Finance Minister Michel Sapin said on Monday. ECB President Mario Draghi struck a dovish tone after the central bank met last week, interpreted by many as a strong signal it will expand the 60 billion euros-a-month asset-buying programme it launched in March to boost growth and inflation in the euro zone, or extend it beyond next September.

New U.S. single-family home sales fell to near a one-year low in September after two straight months of gains, but a jump in prices suggested that housing remained on solid ground. The figure released on Monday showed that sales dropped 11.5percent to a seasonally adjusted annual rate of 468,000 units, the lowest level since November 2014. August's sales pace was revised down to 529,000 units.

With sales weak, the stock of new houses for sale increased 4.2 percent to 225,000 last month, the highest level since March 2010. Still, supply remains less than half of what it was at the height of the housing boom. At September's sales pace it would take 5.8 months to clear the supply of houses on the market, the highest since July 2014. That was up from 4.9 months in August. The median price of a new home rose 13.5 percent from a year ago to a nine-month high of $296,900.

Key Announcements
GBP – 09:30 :Gross Domestic Product (YoY) – expected to remain unchanged at 2.4%
USD – 12:30 :Durable Goods Orders – expected to contract 1.1% from a -2.3% previous
USD – 14:00 : Consumer Confidence – expected to drop to 102.9 from 103 previous