GBP

Construction figures yesterday showed a big increase from 59
last month to 62.6 this month, the highest in six years amid a revival in the
UK housing market. The pound drifted towards a two year high against the US
dollar as a result.

The data is once again very positive for the UK, showing
that the recovery is gaining momentum and once again inciting speculation that
the Bank of England is moving closer to raising interest rates sooner.

GBP

Construction figures yesterday showed a big increase from 59
last month to 62.6 this month, the highest in six years amid a revival in the
UK housing market. The pound drifted towards a two year high against the US
dollar as a result.

The data is once again very positive for the UK, showing
that the recovery is gaining momentum and once again inciting speculation that
the Bank of England is moving closer to raising interest rates sooner.

EUR

The only information out on the Eurozone yesterday was the
Producer Price Index which showed a contraction of 0.5%, greater than the
previous month’s contraction.

Despite the good news from the UK and bad news from the
Eurozone, GBP/EUR did actually drop off slightly, losing around 50 pips.

Data this morning has been positive for the euro with
German, Spanish and Eurozone services figures all beating market expectations,
causing the euro to have the upper hand in early morning trade.

The euro continues to be supported ahead of tomorrow’s
interest rate decision and monetary statement announcement by the ECB, as
pressure for the central bank to lower interest rates has subsided given that disinflation
fears seem to have eroded.

AUD

Overnight we had GDP figures out from Australia which came
in worse than expected at 2.3% against expectations of 2.6%. This has seen AUD
weaken off significantly overnight, dropping to a fresh 45 month low against
the pound.

The data may well spur on the Reserve Bank of Australia to
take action to spur on the economy as the mining investment continues to wane.

Today

Today
most of the focus is on the Eurozone. Most importantly we have GDP figures.
Forecasts are that we will see -0.4% growth which is an improvement on the
previous year’s figures of -0.5%.

Retail
figures are also out for the Eurozone today which is expected to show an
improvement year on year and thus we could well see the euro strengthen
further.

For
the UK, the big one out today is the Markit Services PMI. The service sector
makes up 75% of GDP for the UK so the figures can give us a strong indication
of where the economy is heading. The forecast is we could see a slight decline
from the previous month.

From
the US, the ADP Research Institute is expected to announce 170,000 jobs were
added in November, the highest in five months. We could well see the US dollar
strengthen off the back of this, as the data will add to speculation that the
Federal Reserve may look to taper monetary policy in either December or
January.

Key Announcements:

12.15pm
– USD – ADP Employment Change (Nov): Expected to show 170,000 jobs were added.

13.30pm
– USD – Trade Balance (Oct): The deficit is set to reduce to US$40.00bn.

15.00pm
– CAD – BoC Interest Rate Decision and Rate Statement: Expected to remain at
1%.

15.00pm
– USD – ISM Non-Manufacturing PMI (Nov): Expected to drop to 55.

15.00pm
– USD – New Home Sales (Oct): Expected to improve to 432,000.