GBP

UK Construction firms have continued to grow in October.
Showing the strongest one month improvement to activity since before the
financial crisis. Markit’s PMI data showed that construction growth had
improved from 58.9 to 59.4. Well above the 50 mark which indicates growth in
the sector.

GBP

UK Construction firms have continued to grow in October.
Showing the strongest one month improvement to activity since before the
financial crisis. Markit’s PMI data showed that construction growth had
improved from 58.9 to 59.4. Well above the 50 mark which indicates growth in
the sector.

There was also a report out from Reed Plc indicating job
numbers in the UK have hit a 5 year high. This continues the recent trend of
optimism around the UK economy. A better jobs picture for the UK would give a
good case for the Bank of England to raise interest rates.

A report out today from NIESR (National Institute of
Economic and Social Research) has said that there is a 1 in 5 chance that the BoE
will raise interest rates as early as the first quarter of 2014. However, they
feel it is more likely to rise in mid-2015, around a year before the BoE’s
forecast. The NIESR are also set to publish their GDP forecasts for the three
months leading up to October on Wednesday.

EUR

Data from the Eurozone yesterday was all based around manufacturing.
France and Italy’s output reduced from a month earlier, Spain stayed the same,
Germany showed an improvement and the Eurozone as a whole improved on a month
earlier but came in as expected at 51.3.

This morning there were unemployment figures released
from Spain that showed an increase of the number of additional unemployed people
from 25,000 to 86,000 for the month of October. As a result we are seeing the
euro weaken in early morning trade.

USD

US data showed that the number of factory orders
increased in October to 1.7%. The data did little to support the US dollar
however, as it looks like we saw profit taking on the US dollar following last
week’s better than expected manufacturing figures, ahead of key data from the labour
market in the US on Friday.

AUD

The Reserve Bank of Australia unsurprisingly held
interest rates at 2.5% again for this month. Whilst there are some analysts
speculating that this could be end of rate cuts to be made by the RBA, Governor
Glenn Stevens maintained his tone that the value of the dollar remains
uncomfortably high in order to achieve balanced growth in the economy. The
comments weren’t really a surprise, as Stevens made similar comments two weeks
ago and as a result losses on the dollar were limited.

Today

Service sector figures from the UK this morning has
surpassed expectations and we are seeing the pound rally further this morning.

The US will be in focus this afternoon also with their
own service sector figures, which are expected to be lower than the previous
month.

Key
Announcements:

10.00am – EUR – Economic Growth Forecasts.

10.00am – EUR – Producer Price Index (Sep): Expected to
fall to by 0.7%.

15.00pm – USD – ISM Non-Manufacturing PMI (Oct): Expected
to drop to 54.

21.45pm – NZD – Unemployment Rate (Q3): Expected to fall
to 6.3%.