What is a quiet day for UK and EU data today’s focus will be on the US with markets paying particular attention to durable goods orders for September, and the conference Boards consumer confidence index for October.
With the FOMC expected to announce an end to QE3 asset purchases tomorrow, and Thursdays release of the Q3 GDP figures as background, markets will be looking at the growth in durable goods orders for a steer on the underlying momentum in industrial activity.
The dollar held a two-day decline against the euro on bets U.S. policy makers meeting this week will say they intend to keep interest rates at a record low for an extended period even as they end bond buying. A gauge of the U.S. currency headed for its first monthly drop since June as traders cut the probability the central bank will raise borrowing costs by October 2015 to a 49 percent chance from 85 percent odds at the end of last month. The Fed starts a two-day meeting today.
Domestically the only news of note is that Lloyds Banking Group, Britain’s largest mortgage lender, said third-quarter profit rose 41 percent, beating analyst estimates, as it announced a three-year plan to cut about 9,000 jobs to revamp its business. While the bank has benefited from strengthening economies in the U.K. and Ireland, boosting housing demand, it’s seeking ways to cut costs as customers increasingly use online banking. The bank, which has about 88,000 full-time employees according to its website, has eliminated more than 37,000 jobs since its government bailout in 2008. Not good new for Lloyds Banking employees….
An interesting news article today says that Draghi may help Europe’s rich get richer! With interest rates almost at zero, Draghi is moving into asset purchases to lift inflation to the ECB’s target. The more he nears the kind of tools deployed by the Federal Reserve, the Bank of England and the Bank of Japan, the more he risks making the rich richer, said economists.
MORNING MARKET RATES:
GBPEUR 1.2677
GBPUSD 1.6120
EURUSD 1.2716
GBPSEK 11.748
GBPAED 5.9212
GBPAUD 1.8254
EURGBP 0.7875
GBPJPY 173.84
GBPTHB 52.306