The Pound made gains against the Euro while declining against the Dollar yesterday as October CPI fell to 5.0% vs. 5.1% forecast and allowed the GBP/USD to ease with the Euro down to a new support at 1.5800. The pound will follow the Euro direction but at a slower pace with EUR/GBP currently falling as the Eurozone debt crisis rolls on. EUR/GBP tested the 0.8520 level but closed unchanged near 0.8560. Looking ahead, October Claimant Count forecast at 20k vs. 17.5k previously.

The Dollar made gains against the Euro and the Pound  yesterday as negative sentiment for most of the trading day was reversed in the US session after October Retail Sales came in at 0.5% vs. 0.3% forecast m/m. This is the fifth month that retail sales have come in positive and show the US economy from a consumption point of view is not as weak as some first thought. Some banks upgraded their expectations of Q4 GDP after the figures were released. In US stocks, DJIA +17 points closing at 12096, S&P +6 points closing at 1257 and NASDAQ +28 points closing at 2686. Looking ahead, October CPI forecast at 0.0% vs. 0.3% previously. October Industrial Output forecast at 0.4% vs. 0.2% previously.

The Euro declined against the Pound and the Dollar yesterday as Italian debt spiked back above 7.0% on reports on new Italian PM struggling to gain consensus on new austerity measures. The Market bounced in the US session as stocks reversed direction and sentiment improved on solid US economic numbers. The crisis is not over but the ECB is supporting the bond market stopping things from getting out of control and the Euro crashing. Looking ahead, October CPI forecast at 3.0% y/y unchanged from last month.

 

Data released 16.11.2011

 

UK      09.30 Claimant Count (October)

ILO Unemployment (3 mths to September)

UK      09.30 Average Earnings (3 mths to September)

Ex Bonuses

EU      10.00 Final HICP (October)

UK      10.30 BoE Quarterly Inflation Report

US      13.30 CPI (October)

Ex Food & Energy

US      13.30 Real Earnings (October)

US      14.00 TICS Capital Inflows (September)

US      14.15 Industrial Production (October)

Capacity Utilisation

US      15.00 NAHB House Builders’ Sentiment (Nov)

 

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