Markets were fairly lacklustre yesterday and volatility was
minimal with little data to drive currencies in any clear direction – investors
appear to be waiting on the side lines until the release of the overdue data
from the US.

Markets were fairly lacklustre yesterday and volatility was
minimal with little data to drive currencies in any clear direction – investors
appear to be waiting on the side lines until the release of the overdue data
from the US.

There were two things to note yesterday. Firstly, The US
National Association of Realtors confirmed that existing home sales fell by
1.9% in September to 5.29mln units from 5.39mln in August. Secondly, Rightmove
revealed that house prices in London rose by 10% in October from the previous
month and across England and Wales house prices rose by a more modest 2.8%.

Today UK public sector borrowing costs are due for release,
with expectations for Britain’s budget deficit to have narrowed in September

With very little else on the European calendar this morning,
investors will be keeping an eye on the delayed US non-farm payroll and
unemployment rate figures for the month of September. Expectations are for an
extra 180,000 jobs to have been added with the unemployment rate sticking at
7.3%. A good non-farm payroll figure may provide the US dollar some relief and
we may see investors use the data as a reason to take profits on the recent
weakness of the US dollar.

If however we see a disappointing figure released then we
could a larger negative reaction on the US dollar.

Key Announcements:

9.30am – GBP – Public Sector Borrowing (Sep): The budget
deficit is set to fall to £10.4bln.

13.30pm – CAD – Retail Sales (Aug): Expected to have risen
only by 0.3%.

13.30pm – USD – Nonfarm Payrolls (Sep): An extra 180,000
jobs are forecasted to have added.

13.30pm – USD – Unemployment Rate (Sep): Expected to remain
at 4 ½ year low of 7.3%.

15.00pm – USD – Construction Spending: Previously increased
by 0.6%.