Data deficiency delivers doldrums?

October 6th: Highlights

• CHF CPI data
• US Trade Balance
• ECB President Draghi Speaks

Sterling Comment

The markets were left relatively cold by the UK PMI data yesterday. The reading of 53.3 not only missed forecast, it was beaten by the equivalent readings from Eurozone and the U.S.

The market reacted logically and Sterling lost 0.5c against EUR and USD. There was a bit of a reversal, recovering against the EUR, but against most counterparties, Sterling suffered.

Global Comment

Is the market hooked on cheap money? The prospect of continued loose monetary policy seems to have helped to improve general trading sentiment, which was demonstrated by another strong close on Wall Street last night. China’s national holiday might be helping (risk off when the market is closed!), but sentiment has been helped by the Trans Pacific Partnership trade deal which reports potential annual benefits of $295bn by 2025.

This morning, most majors are broadly flat against the dollar so far and there is very little data due today. Swiss CPI is the highlight in the morning session, which is expected to confirm continuing deflation at -1.4%. This afternoon, we have the US trade balance, which is expected to post -$47.4bn, down from -$41.9bn last month. This could put the dollar under a little pressure, but range traded is otherwise widely expected. There are speeches this evening from the ECB’s Mario Draghi and two Federal Reserve presidents.

Have a great day!