UK inflation data dominates the day

Today's Highlights

China's international trade slumps

UK high street activity rises

UK inflation data dominates the day

FX Market Overview

Monday was a bit of a yawn; especially for US traders who had a day off. Jealous? Moi? Things heated up overnight when UK high street spending, as measured by the British Retail Consortium, rose by 3.9% in September compared to the same month last year. You could cite the Rugby World Cup, the improved weather or anything you fancy but it's a good figure whichever way you look at it. Whether that has had any impact on or has been impacted by the inflation figure will be answered at 08.30 GMT when UK inflation data is published. As well as consumer inflation, we'll also get the production level inflation in the input and output price data. We are not expecting any great change in any of these numbers; flat commodity prices are keeping the growth out of prices but that means there is scope for a surprise and we need to be aware of that.

Also overnight, we had a report from China showing a substantial increase in their trade surplus. That was well ahead of expectations but is the slump in import demand (down 17.7% on the year) a good or bad thing? That was the 11th month in a row where imports have fallen and it sort of hides the 1.1% drop in exports but that was much better than the 7.4% decline most analysts had predicted. Is the worst over for China? It is far too early to say but the decline continues and that is not good news for China's suppliers.

One of those suppliers is Australia and we heard overnight that business confidence in that economy remained stable in September. A downward revision in August's reading meant the index read at 9 for both months. That is on the right side of positive but only just. The Aussie Dollar has been pretty volatile overnight as you might expect and is marginally weaker today than it was yesterday.

This morning brings German inflation data as well as the well-respected ZEW business expectations index. As with most other economies, inflation doesn't really exist in Germany but the VW scandal is likely to have caused a drop in business confidence, so watch out for that. The Sterling – Euro exchange rate is sitting heavily on the €1.3450 support so we will have to see is this morning's data can give the Pound a bit of a lift.

And I am sure I was not alone in wondering whether it was April 1st when I read that the Crown Prosecution Service was warning that hover-boards were not legal on the pavement. I didn't even know they'd been invented so I had to Google it on the basis of 'I want one'. Apparently a two wheeled platform that moves you around like a Segway is being marketed as a hover-Board. But that just isn't true is it. What happened to advertising standards? It might be a board but it doesn't actually hover does it. That is just a cruel blow to my hopes and dreams. I am sure Tomorrow's World (you may be too young to remember that) promised us proper hover-boards that hovered by now. Oh how cruel. I am bereft.