EUR

Investors holding out for higher GBPEUR
levels breathed a sigh of relief as worse than expected data from the Eurozone caused
the euro to have its biggest intraday drop since June.

The Eurozone’s unemployment rate remained unchanged at a record high of
12.2% in September. The number of people out of work rose by 60,000 to 19.45mln.

EUR

Investors holding out for higher GBPEUR
levels breathed a sigh of relief as worse than expected data from the Eurozone caused
the euro to have its biggest intraday drop since June.

The Eurozone’s unemployment rate remained unchanged at a record high of
12.2% in September. The number of people out of work rose by 60,000 to 19.45mln.

Inflation data in the
Eurozone also disappointed markets as the rate only rose by 0.7% below the
expected rise of 1.1%. While this is welcome news for Eurozone consumers as it
helps their purchasing power, inflation is getting uncomfortably low for the ECB
as it is now substantially below its target rate of 2.0%.

In Germany the Eurozone’s
largest economy was hit by weak consumer data as German retail sales fell unexpectedly for a second month in September, down
0.4% on a monthly basis. Economists had expected a 0.4% rise. Consumer confidence in Germany also fell unexpectedly.

As a result of these poor figures some
economists believe the ECB will cut its refinancing rate to
0.25% from 0.5% at its meeting in December,

GBP

UK
consumers borrowed money at a rate not seen since the onset of the global
financial crisis since April 2008.

The Bank of England said that unsecured lending to consumers rose by £864mln
last month; The Bank incorrectly reported earlier in the week that it had risen
by a much smaller £411mln

The jump meant that unsecured lending in the three months to
September increased by 5.8% on an annual basis, the strongest growth.

As mentioned in our earlier reports this highlights the concern
the UK is relying on a debt-fuelled recovery, in order to rebalance the economy
in a sustainable manor spending needs to be directed towards investment
manufacturing and exports.

USD

There was
some positive news for the US yesterday after all the negativity surrounding
the debt ceiling and shutdown.

Chicago’s October purchasing manager’s index jumped 10.2 points to 65.9. It was the biggest
monthly increase in more than 30 years, and the highest level since March 2011.

Double
digit gains in new orders, production and order backlogs all boosted the
business.

The
number of people filing for jobless claims also fell by 10,000 from the
previous week supporting the US dollar further.

AUD

Data from
China overnight showed that manufacturing climbed
to an 18-month high of 51.4 in October, compared with 51.1 in September. Analysts
are now thinking China could exceed its 7.5% growth target this year. The data
is good news for China’s biggest trading partner, Australia, causing the dollar
to gain by 0.5% in overnight trade.

Today

UK
manufacturing PMI is due this morning as well as manufacturing PMI from the US.
Given yesterday’s impressive figures from the Chicago, we may see a higher than
expected print coming in from the US.

Key Announcements:

9.28am –
GBP – Markit Manufacturing PMI (Oct): Expected to expand to 56.1.

13.58pm –
USD – Markit Manufacturing PMI (Oct): Previously at 52.8.

14.00pm –
USD – ISM Manufacturing PMI (Oct): Expected to expand to 55.