As the anticipated news broke that the UK exited recession
in the third quarter, sterling congruently grew with the buoyancy that was
awash in the economy.

Originally expected to come in at 0.6%, a surprise figure of
1% was released as signs that the UK’s economy is improving. The Bank of
England’s deputy governor claimed Britain to be ‘past its worst’, taking great
confidence from the result, investors caused the pound to rise against almost
all major counterparts.

As the anticipated news broke that the UK exited recession
in the third quarter, sterling congruently grew with the buoyancy that was
awash in the economy.

Originally expected to come in at 0.6%, a surprise figure of
1% was released as signs that the UK’s economy is improving. The Bank of
England’s deputy governor claimed Britain to be ‘past its worst’, taking great
confidence from the result, investors caused the pound to rise against almost
all major counterparts.

It is worth noting that these gains are, in large part, the
residual economic effects from the summer Olympics, however this did not
prevent a consistent rally against the euro and consolidated early gains
against the greenback.

The big news of the last night saw the Bank of Japan
announce further stimulus in a move to fend off recession in the far eastern
country. With markets already prepared for the announcement, shown by a weak
yen performance throughout the day, the currency actually showed early strength
on the back of the release, a move complemented by poor performance in Asian stocks.

In the US, generally positive data showed a continuation of
the momentum seen in recent weeks. Capping sterling’s gains, the positive data
showed investors that QE3 is taking effect, whilst negating the speculation
that the Fed will pump more monthly stimulus.

News this morning shows Spanish unemployment breached 25%. Already
the rise has caused bond yields to increase, piling on the pressure for Prime
Minister Rajoy to step up his bailout efforts.

 

Today’s Key
Announcements:

• 08.00am – EUR – Spanish Unemployment Rate: 25%, up from
  24.6%
• 13.30pm – USD – Advance GDP q/q: expected to rise to 1.9%
• 13.30pm – USD – Consumer Sentiment: expected to marginally
  fall to 82.7