The markets at the moment are all led by the strength of the US Dollar. What was once seen as a contest between the UK and the US for the first country to raise interest rates is quickly becoming a one horse race. All news out of the US recently has been extremely positive and this was highlighted by stronger than expected nonfarm payroll figures out on Friday and unemployment levels which are at their lowest level since July 2008. Quantitative easing looks like it was a success, financial stability is on its way and a rate hike looks primed for Q1 2015.
The Pound needs a lift at the moment as any stronger than expected data seems to be pushed aside by the markets. The markets will look to the MPC minutes on Thursday for guidance. Service PMI came out lower than expected and Vince Cable belatedly joined the IMF and the Bank of England’s Ben Broadbent in commenting that Britain’s exports are being hampered by the strength of the Pound which is 10-15% overvalued…
The Eurozone is struggling and that position has been further worsened by disappointing German factory orders. We await with interest Mario Draghi speaking later in the week.
Today is a relatively quiet day for data but there is lots to look forward to later in the week with the MPC meeting and G20 summit.
Posted in Daily Market News on Oct 6 2014