Daily Market Report – 01/10/2015

GBP
Figures released yesterday showed that the U.K economy grew in line with
expectations in the second quarter, underlining optimism over the health of the
economy and supporting the case for higher interest rates. GDP expanded at a
rate of 0.7% since the end of June which met with forecasts.

The UK economy grew by 0.4% in the first quarter of the year. We also saw the
U.K.’s current account deficit narrow more than expected in the second

GBP
Figures released yesterday showed that the U.K economy grew in line with
expectations in the second quarter, underlining optimism over the health of the
economy and supporting the case for higher interest rates. GDP expanded at a
rate of 0.7% since the end of June which met with forecasts.

The UK economy grew by 0.4% in the first quarter of the year. We also saw the
U.K.’s current account deficit narrow more than expected in the second
quarter of the year. The current account recorded a seasonally adjusted deficit
of £16.8 billion in the three months since June, narrowing from a deficit of
£24.0 billion in the three months before.

EUR
Economists at credit rating agency Standard & Poor’s have warned that
slowing growth in China would have strong knock-on effects for the Euro zone
and some of Europe’s largest economies.
 
S&P ran a simulation to assess the effects of China’s real growth slowing
to 4.4. per cent next year and 3.9 per cent in 2017, instead of 6.3 per cent
and 6.1 per cent, respectively, as previously predicted. They found that
Eurozone real GDP would be 0.8 per cent lower than their current forecast by
the end of 2017. Germany and the Netherlands would be hit even harder,
with their real GDPs downgraded by 0.9 per cent and 1.5 per cent, according to
S&P

The Eurozone slipped back into deflation yesterday, as the European Union’s
statistics office, Eurostat, reported that prices in the single currency area
had fallen year-on-year in September for the first time in six months.
 
Eurostat estimated that consumer prices in the 19 countries sharing the euro
fell 0.1 per cent last month compared to the same month the previous year,
after a 0.1 per cent rise in August. The main factor behind the easing was
a sharp annual drop in energy prices, which fell 8.9 per cent after a 7.2 per
cent fall in August. 

USD
U.S. non-farm  employment rose by 200,000 this month, beating forecasts at
194,000 and hinting jobs growth may be sufficient for the Federal Reserve to
raise interest rates later this year. The US Chicago purchasing managers’ index
fell by 5.7 points to 48.7 this month from a previous reading of 54.4 in
August. The index was expected to fall 1.4 points to 53.0 in September. 

Key Announcements
EUR: 9:00 – Markit Manufacturing PMI (Sep) Expected to stay the same at 52
GBP:9:30 – Markit Manufacturing PMI (Sep) Expected to fall to 51.3 until 51.5
USD: 15:00 – ISM Manufacturing PMI (Sep) Expected to fall to 50.6 from 51.1
USD:  15:00 – Construction Spending (MoM) (Aug) Expected to fall to 0.5%
from 0.