Welcome to your weekly market analysis email from Currencies Direct where you can stay one step ahead of your friends on the latest news and reviews of the financial markets. Our aim is to provide you with an easily digestible weekly update of how the financial market is performing using the expertise of your dealers who make it their sole aim to keep on top of the market movements.
GBP
It's been a mixed week for the UK. Inflation report released earlier last week showed annualized consumer price growth easing from 2.5% to 2.2% which suggest the Bank of England might have room for more monetary stimulus. Economic data out of the UK has been far from exciting with manufacturing and service sector activity contracting at a faster pace in September. The housing market has also slowed and in September Nationwide and Halifax reported a price fall. On a brighter note, employment in the UK soared to new all-time high in the three months to August. Employment grew 212,000 compared to the previous three months to hit 29.6M while unemployment dropped 50,000 bringing the rate down from 8.1% to 7.9%. Retail sales grew 0.6% in the month of September.
EURO
Once again all eyes were on Europe. Earlier last week markets were trading higher in trepidation as reports of Spain ready to request their bailout dominated the news. Germany also seemed open to precautionary credit for Spain and this had investors feeling good about the future. The Spanish 10 year bond dropped below 5.3% to its lowest level in 6 months following another solid Spanish bond auction. In the meantime another EU summit has taken place with no major outcome. As largely anticipated European officials were not going to make any major decisions but they seemed to be paving the way to set out a timeline for a European banking union.
USD
Most of the US data points to a better than consensus views and shows that the US economic recovery is robust. Macroeconomic data from US Consumer Price Index (2%) to other secondary data pointed to a better picture. Net Long Term TIC Flows ($90.0B), Industrial Production (0.4%), Capacity Utilization (78.3%), and NAHB Housing Market Index (41). For the first time in 6 months, manufacturing activity in the Philadelphia region expanded. The picture is mixed on the labour front where jobless claims increased to 388k from 342k. This increase in claims suggests that the labour market may not be performing as well as the drop in the unemployment rate suggests. With hope on positive news coming from the EU summit and better economic indicators from China, the markets are experiencing a move back into risk which has resulted in a weaker dollar.
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Jose A. Polo
Commercial Manager
Spanish Best Homes
0034 648 504 971
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