EUR
Inflation in the Euro zone edged up slightly in October, reinforcing the view
that the European Central Bank will hold fire on any additional policy action
at its meeting next week. A first estimate on Friday from the European Union’s
statistics office showed consumer prices in the euro zone rose by 0.4 percent
in October in line with market expectations. A day earlier German
data showed inflation in Europe’s largest economy slowing in October to 0.7
percent, its lowest reading since May.

EUR
Inflation in the Euro zone edged up slightly in October, reinforcing the view
that the European Central Bank will hold fire on any additional policy action
at its meeting next week. A first estimate on Friday from the European Union’s
statistics office showed consumer prices in the euro zone rose by 0.4 percent
in October in line with market expectations. A day earlier German
data showed inflation in Europe’s largest economy slowing in October to 0.7
percent, its lowest reading since May.

Many analysts have said a number of factors meant ECB action as early as next
week was unlikely, but that he expected further measures by the first quarter
of next year. ECB policy-makers still appear somewhat divided on the
likelihood of deflation in the euro area. The central bank’s chief economist
Peter Praet told Belgian media earlier this week that the possibility was
limited stating  “We are not in deflation but we cannot ignore
the concrete risk of it”.

The statistics office said prices rose fastest for services, up 1.2 percent,
followed by a 0.5 percent increase in food, alcohol and tobacco costs.The ECB,
which has a mandate to keep inflation below but close to 2 percent, has
committed to an expansionary policy, including an asset-buying plan, and has
said it will consider further measures if needed.

Data also showed on Friday that unemployment in the euro zone remained
unchanged at 11.5 percent in September.

USD
The drop in fuel prices could not  have come at a better time for the
U.S economy. Consumer spending unexpectedly dropped 0.2 percent in
September, weaker than any economist projected, after rising 0.5 percent in
August, according to Commerce Department data issued in Washington. The report
also showed incomes rose at a slower pace last month.

The lowest costs at the gas pump in four years and the biggest payroll gains in
more than a decade are projected to lift buying power and household purchases
heading into the holiday-shopping season. Other reports today showed consumer
confidence jumped this month to a seven-year high and manufacturing in the
Chicago area picked up, bolstering prospects for a rebound.

JPY
Bank of Japan Governor Haruhiko Kuroda today pushed through an expansion of
what was already an unprecedented large monetary-stimulus program. The central
bank’s board, in a divided 5 to 4 vote, raised its annual target for enlarging
the monetary base. The Yen has weakened off significantly over the last couple
of days as a result. 

Key Announcements:
09:30 EUR: UK manufacturing PMI (Oct) expected to fall from 51.6 to
51.5   
15:00 USD: US ISM manufacturing PMI (Oct) expected to fall from 56.6 to
56.5   

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