Asian stock markets closed higher, with the ASX buoyed by slightly stronger than expected Q3 Australian GDP. Futures markets show European bourses opening higher as markets await the EU Heads of State summit at the end of the week. EU officials are apparently now discussing two separate bailout funds, presumably with the hope that this will mitigate the threat of a sovereign downgrade from S&P.
The euro opened slightly higher this morning at $1.3440. The euro also rallied against sterling, regaining 1.16 in early trading.
UK shop price inflation slowed in November to its weakest rate for the calendar year. According to the British Retail Consortium, shop prices rose by 2.0% on a year ago, with food prices rising by 4.0%, while non-food prices rose by 0.8% a similar annual rate to that seen in October. Warmer weather meant that closing prices fell by 3.2%. The fall in retail price inflation is in line with other data pointing to a slow start to Christmas sales.
A further check on the direction of travel for the UK economy comes from October industrial production data. The market is looking for a 0.3% fall in output after September’s flat outturn. A similar fall is expected in manufacturing output, which would slow the annual rate from 2.0% to 1.4% and point to a very weak GDP growth rate in the fourth quarter. We remain a little more optimistic than consensus, looking for a 0.1% fall in manufacturing production, with industrial output flat on the month due to an increase in North Sea oil and gas extraction.
The 5.2% jump in German factory orders provides some upside risk to the consensus forecast for a 0.3% rise in October industrial production. Markets had expected only a 1% rise in the volatile factory orders series, but the much stronger increase suggests that the German economy might be able to avoid a fall in output until at least December, avoiding the recession that the eurozone looks to already be in.
US consumer credit data is increasingly being determined by growth in the government sector- which in this case means student loans, rather than private sector credit. Given the high level of some interest rate charges, it is hardly surprising that households have been paying down consumer debt. With mortgage demand also flat, the major growth area has been in student loans and we expect that to continue. We would need to see the recent upward trend in auto sales continue to see an extension in private sector credit demand. The market looks for consumer credit to rise by $7 billion in October after a $7.4 billion increase in September. We suspect that there is some upside risk to this forecast, but with markets still focused on the eurozone we doubt that there will be any.reaction.
What does this all mean for me? Well buying your EUR, USD, AUD or any other currency at the wrong time could cost you a fortune. There is no crystal ball but Currency UK can give you the information you need to make an informed decision.
Posted in Daily Market News on May 30 2014
Once again, Europe and the prospects for the Single Currency dominate investor sentiment. Tempting as it is to dismiss the upcoming Summit on Friday as yet another trigger for disappointment, there is arguably a greater chance of success than any of the previous hubristic gatherings.VIEW FULL ARTICLE
Posted in Daily Market News on Dec 5 2011 by alex