Last week sterling appreciated against many of its
counterparts as positive growth data dimmed speculation regarding a further
Bank of England easing programme.

We saw GDP growth extend well beyond analysts’ expectations,
reaching 1% for Q3. Though the figures are supported by the positive impact of
the summer Olympics, the improvements seen were enough to justify weekly gains
versus both the dollar and euro.

Last week sterling appreciated against many of its
counterparts as positive growth data dimmed speculation regarding a further
Bank of England easing programme.

We saw GDP growth extend well beyond analysts’ expectations,
reaching 1% for Q3. Though the figures are supported by the positive impact of
the summer Olympics, the improvements seen were enough to justify weekly gains
versus both the dollar and euro.

In Europe the image is starker. Tuesday brought with it a
host of bad manufacturing data, whilst Spanish unemployment reached 25%.
Previously bad news in the region has prompted euro strength, indicating that a
Spanish bailout would become a necessity. This time though, thanks to success
in Spain’s regional elections, conditions suggest that Rajoy will try to
continue sovereign financing without requesting external aid, which led to
weakness in the shared currency.

Japan has been leaning ever closer to increasing its
quantitative easing. This week the Bank of Japan is expected to announce the
extent of the new stimulus as it plans to boost the stuttering economy and its
export revenues, the weakness that this has brought however was negated on
Friday and continued today as global equity concerns brought investors back.

Whilst in the US as storms prepare to batter the East coast
and the presidential election enters into the finishing straight, the economy
is exhibiting signs of its consistent, though unspectacular, recovery. Investors
may look to the protection of safe havens as the NYSE closure and Greek
concerns spook confidence.

 

Key Announcements
Today:

• 12.50am – JPY – Retail Sales: under expectations at 0.4%
• All Day – EUR – German Prelim CPI: expected flat
• 10.30am – GBP – Net Lending to Individuals: expected to
  increase to 0.6bn
• 13.30pm – USD – PCE Price Index: expected to remain flat at
  0.1%
• 13.30pm – USD – Personal Spending: slight rise expected to
  0.6%