GBP

Mixed data from the UK this morning. Firstly, GfK consumer
confidence fell for the first time in six months in October – erasing some of
the optimism that we have seen over the last six months for the UK. Data from
Nationwide showed that house prices have risen at the fastest annual pace in more
than three years, rising by 5.8% in October.

GBP

Mixed data from the UK this morning. Firstly, GfK consumer
confidence fell for the first time in six months in October – erasing some of
the optimism that we have seen over the last six months for the UK. Data from
Nationwide showed that house prices have risen at the fastest annual pace in more
than three years, rising by 5.8% in October.

The data continues to provide ammunition to those of the
opinion that the UK could well be under risk of another housing bubble – which could
well be detrimental for future UK growth.

USD

Data from the US yesterday backed up recent speculation that
the Fed may not be ready to taper their quantitative easing plan until March
next year.

ADP payroll data showed that only 130,000 jobs were added in
October falling shy of an expected 150,000 to have been added. The data was
hardly surprising though given the government shutdown and this obviously has
caused concerns about the health of the economy.

US inflation fell to 1.7%, missing an expected 1.8%. The
rate remains below the Fed’s target of 2%, a criteria for tapering QE.

Unsurprisingly, the Fed maintained QE at monthly bond purchases
of US$85bln, being accommodative depending on economic data. However judging by
movements in the markets following the announcement, the US dollar strengthened,
the Fed’s comments seem to have been judged less negative than markets were
expecting.

JPY

The Bank of Japan also left its monetary policy unchanged
but did adjust some of their economic projections. Inflation is forecasted at
1.9% by end of 2015 and growth has been revised higher to 1.5% for end of year
2015. The yen as a result appreciated.

NZD

The Reserve Bank of New Zealand held interest rates at 2.5%
last night with any potential hike in the cash rate depending on the strength
of the housing market. The comments were deemed upbeat causing the New Zealand
dollar to rise by 0.6 cents against the pound.

Euro

S&P Dow Jones Indices have downgraded Greece from
developed market to emerging market status as their growth lags behind those
nations of similar characteristics.

Data from Germany has disappointed with consumer confidence falling
shy of expectations for October, along with retail sales falling shy of expectations,
only rising by 0.2% in September. As a result we have seen the euro drop off to
the tune of 0.2 cents against the pound in early morning trade.

Today

Inflation in the euro zone is expected to be stagnant at
1.1% in October, backing the ECB’s stance on maintaining interest rates at 0.5%
for a prolonged time. Focus will also be on the unemployment situation in the
euro zone, with expectations that the unemployment rate will be maintained at
12%.

The US employment situation will also be in focus this
afternoon.

Key Announcements:

10.00am – EUR – Consumer Price Index (Oct): Expected to
remain at 1.1%.

10.00am – EUR – Unemployment Rate (Sep): Expected to remain
at 12%.

12.30pm – USD – Initial Jobless Claims (Oct 25): Expected to
fall by 10,000 to 340,000.

13.45pm – USD – Chicago PMI (Oct): Expected to fall to 55.