Sterling awaits GDP data

Today's Highlights

Sterling awaits GDP data

German businesses are confident but Government unhappy with ECB

FX Market Overview

Mr Cameron's day started off badly after the EU sent Britain a tax demand for an extra €2.1 billion but issued rebates to France and Germany. The oddity is that whilst the Franco/Deutsch pair is getting a rebate, economically embarrassed Greece has also had a demand for higher taxes. The battle lines are being drawn and I suspect, if we had a UK 'In or Out' referendum on Europe right now, the OUT camp would win the day. Let's hope the Prime Minister's day is boosted by positive growth figures when the Q3 GDP data is published in first draft form at 08:30 GMT. The forecasts are for a minor reduction to an annualised 3.0% but this data has been quite erratic over the past year so it's anybody guess. Sterling

German business confidence is quite buoyant according to the GFK sentiment index. At 8.5, the index doesn't look impressive. However, that is an improvement on the 8.3 forecasts and only marginally down on the previous month. This comes at a time when the relationship between the German and EU leaders is on very shaky ground. This can be seen in the German government's reluctance to show any support for the ECB's policy stance. Germany is clearly unhappy with the lax attitude to EU rules being shown by France and Italy; especially with regard to these country's budget deficits. The EU has until the end of next week to reject the budgets submitted by France and Italy and they may well do so if Germany has its way. It's all getting a bit tense. But that is next week's excitement. In the present tense, the Sterling - Euro exchange rate is in mid-range right now. So, in the absence of any further EU data, this morning's UK data will be very influential as we head towards the weekend.

Today's data diary is about as full as the 'South Yorkshire Police' section of Cliff Richards' address book. So traders will be scrabbling around looking for reasons to trade. We will get US new home sales but that isn't going to be enough to make big waves. As such, I suspect we will have a reasonably quiet day in volatility terms.

Away from the markets, two radio stations in San Francisco have acted a little rashly in my opinion. Their local baseball team, The San Francisco Giants are due to play a big game in the World Series (It's the US series really but that clearly didn't sound grand enough). Their opponents will be the Kansas City Royals. In preparation for the game, both stations have banned NZ singer Lorde's song, 'Royals'. The song, which is about aspiration and an indictment of materialism, has nothing to do with baseball and I think they have got the wrong end of the stick. I would have thought the lyric, 'So we'll never be Royals, It don't run in our blood', would have been a great line for Giants Fans but I suspect the radio stations have never listened to all the lyrics. They should. It's a great song.