GBP

The Office for National Statistics (ONS) revealed that
unemployment in the three months to October was £2.39 million, or 7.4% of the working
age population, down from 7.6% in the three months to September. Expectations
are growing that Britain’s first interest rate rise since the crisis will come
sooner than Bank of England governor Mark Carney has indicated, given yesterday’s
strong jobs data.

GBP

The Office for National Statistics (ONS) revealed that
unemployment in the three months to October was £2.39 million, or 7.4% of the working
age population, down from 7.6% in the three months to September. Expectations
are growing that Britain’s first interest rate rise since the crisis will come
sooner than Bank of England governor Mark Carney has indicated, given yesterday’s
strong jobs data.

As a result we saw the pound jump up against most of its
major trading partners as this raised the expectation that the BOE will
consider raising interest rates once the unemployment rate reaches the 7%
threshold outlined in their forward guidance.

The Bank of England interest rate committee also voiced its
concerns over the strength of the pound and the detrimental impact this could
have on the improving economy. With the BOE Stating that any further
substantial increase will pose “additional risks” to the economic recovery.

USD

The US Federal Reserve has announced a slowdown in its
effort to boost the US economy. The central bank said it planned to scale back
its $85bn a month bond buying programme by US$10bn a month to US$75bn beginning
in January 2014.

Bernanke and the Fed were also very cautious on the recovery
in the US and made an adjustment to its forward guidance stating that interest
rates will be kept at extremely low levels well past the time that unemployment
rates decline past 6.5%. This stance will be further reinforced if inflation
remains at or below 2% in the long run.

After this initial announcement there was a large sell off
in the USD but it eventually strengthened against most of its major trading
partners.

INR

India’s central bank unexpectedly kept its interest rates on
hold at 7.75% maintaining their strong stance on inflation warning that it
would act if needed to maintain.

Today

UK retail sales have marginally disappointed this morning
limiting gains for the pound. Month on month sales rose as expected by 0.3% but
year on year figures only rose by 2.3% and not by the expected 2.5%.

The US is releasing unemployment data out at 13.30pm with
continuing jobless claims and initial jobless claims expected to show a slight
improvement on the previous figures.

Key Announcements:

13.30pm – USD – Initial Jobless Claims (Dec 13): Expected to
fall to 334,000.

15.00pm – USD – Existing Home Sales Change (Nov): Expected
to fall by 1.5%.

15.00pm – USD – Philadelphia Fed Manufacturing Survey (Nov):
Expected to rise to 10.