Today’s Commentary
The NZD was range-bound overnight as the BoE and the ECB made their interest rate announcements.
The banks have both chosen to leave rates on hold but the BoE decision to raise its quantitative easing plans by only GBP 25 billion was encouraging as it is at the lower end of analysts’ forecasts. Comments from the ECB president that the economy has recently been showing signs that are “very encouraging” and he expects to see Europe “recover at a gradual pace in 2010” were also taken as mildly bullish.
In the US non-farm productivity grew at an annualized 9.5%, the fastest rate in 6 years. There was also good news out of the labor department which released data showing that unemployment benefit claims fell to 521,000 at the end of October, down from 530,000 the previous round.
Equities had been subdued leading up to the releases with the Nikkei down 1.3% but as the night progressed confidence returned. London’s FTSE ended 0.40% up and Americas S&P 500 is currently up over 1.5%.
In contrast currency markets are more cautious with the official US employment figures due out tonight. The expectation is for unemployment to rise to 9.9% but expect the market to be sensitive to any move into double digits.
Upcoming Announcements:
• 06 November 09: AU RBA Statement on Mon. Policy
• 06 November 09: GE Factory orders
• 06 November 09: US Non-farm payrolls
• 09 November 09: NZ QV House sales
• 09 November 09: GE Trade balance
By Sam Spink-McCarthy, Corporate Dealer
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