Daily Report

Markets in a Flash

• The Pound strengthened suddenly this morning when UK data came in better than expected. The EUR/GBP is moving back towards its monthly lows
• The USD/JPY has started trending down towards its lows in the past few hours.
• US equity futures are higher this morning suggesting a continuation in the rise in equity markets from yesterday’s session.
• Oil and Gold are not doing much in today’s session at around $75.50 and $1230.00 respectively. Wheat futures are pushing higher and are up nearly 3%.
• Asian markets finished higher across the board overnight. The Nikkei 225 in Japan was up +1.32%.
• European equity markets are higher this morning after going negative for a short while after the open. Europe has been made more bullish by the strong UK data.

News Focus

0430ET – UK Retail Sales

Retail Sales m/m

Previous 0.7%
Consensus 0.4%
Actual 1.1%

This month’s UK retail sales were reported early this morning and came in well ahead of consensus. The monthly change was reported as a rise of 1.1% compared with the markets expectation of 0.4%. This FTSE100 jumped higher on this news. Along with this news it was reported that the UK’s net public borrowing rose less than expected.

0830ET – US Jobless Claims

Previous 484 K
Consensus 480 K
Consensus Range 465 K to 495 K
Actual 500 K

Today’s Jobless claims data of 500K is worse than expected and worse that last weeks. This shows that the labour market in the US is worse than economists and investors had thought. This is bearish for the markets and shows a continuation in the rising trend.

German central bank raises growth forecasts

After the German economy expanded in the second quarter at its fastest pace in the past two decades the German central bank has increased its forecast growth rate. It has raised its forecast of GDP growth to 3% for 2010 from the 1.9% prediction in June.

General Motors confirms Initial Offering

The US car producer, General Motors Co, which is 61% owned by the US taxpayer is set to be brought to market. The company may face trouble with its IPO as it continues to lose market share and struggles to return to profit.

Coming up Today

1000ET – US Philadelphia Fed Index

General Business Conditions Index - Level

Previous 5.1
Consensus 7.0
Consensus Range -0.6 to 10.0

This index is similar to the ISM Manufacturing Index and tends to correlated with it. It is an index of manufacturing conditions in the Philadelphia Federal reserve District. The index has dropped in the past few months from being around 20 to last month’s reading of 5.1. It is expected to show a small rise today to 7.

1030ET – US Natural Gas Report

The weekly report by the Energy Information Administration provides data on US natural gas stocks. A report showing a drop in natural gas stocks may signal increasing demand in the economy and see an increase in the price of the commodity.