Daily Update - 31st October 2018
The common currency remained under pressure amid poor local data and persistent political concerns. During London trading hours, later extending the slump to 1.1339. EU Q3 GDP was a big disappointment. The EU Economic Sentiment Indicator posted a larger-than-expected decline in October. Italian Deputy PM Salvini stated that the GDP slowdown is another reason to press ahead with the budget expansion. Meanwhile, the Pound remains the weakest currency across the board, briefly piercing the 1.2700 level in the US afternoon to post its second worst yearly close. Absence of progress in Brexit negotiations all combined to weigh Sterling lower For the EUR, economic data due out of the Eurozone includes 3rd quarter GDP numbers out of Spain, prelim October inflation figures out of France, Italy and the Eurozone, with the Eurozone’s unemployment numbers also there to consider, focus being on GDP and inflation figures through the day, any uptick in the annual rate of inflation likely to provide minor support to the EUR following the weaker than expected 3rd quarter GDP numbers released on Tuesday. Outside of the numbers, expect more on the geo-political front, the EUR on the back foot for now. For the Pound, it’s another quiet day on the data front, leaving the Pound to struggle as the markets consider what lies ahead for the British economy in a post Brexit world, with the talk of a Norway trade agreement meeting resistance in the early part of the week and S&P issuing the prospects of a ratings downgrade in the event of a ‘no deal.’ Across the Pond, stats are on the lighter side though likely to pack a punch, with October’s ADP nonfarm employment change, 3rd quarter employment cost numbers and October’s Chicago PMI scheduled for release.Yesterday’s Focus
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