The effects of yesterday’s Fed announcement ran into the overnight Asian session, with the more-hawkish-than-expected tone struck by Fed chairman Janet Yellen helping to lift the dollar across the board.

UP

Despite the bulk of the USD gains coming immediately following the Fed’s announcement yesterday, the dollar managed to carry gains into the overnight session, gaining 0.28 percent against the euro and 0.26 percent against the yen.

The Ftse gained 0.81 percent yesterday,closing before the Fed announcement on hopes that the Fed would strike a dovish tone. Intertek was the biggest winner, up 5 percent.

The Nikkei fared well overnight, gaining0.67 percent.

NZD held its ground, clinging onto 0.01percent gains at USD0.7803, despite data released by the Reserve Bank of NewZealand showing that it had sold just NZD30m in September, down from NZD521m inAugust. The low figure surprised given the strong language from the RBNZ over the strength of the NZD.

DOWN

Most lost ground against the dollar overnight. US 10-year Treasury yields fell 2 basis points overnight.

US markets fell on yesterday’s Fed tone,with the Dow down 0.18 percent to 17,005.07. Nasdaq declined 0.33 percent to4,551.

In the Ftse, Capita fell by 6 percent after losing out on a government contract to run offender rehabilitation centres.Next cut its full-year profit guidance, from GBP775m-815m down toGBP750m-GBP790m, citing the effects of milder weather on the demand for winter clothes. Shares fell by 0.3 percent on the revision. The announcement had knock-on effects on other clothing retailers, with Marks and Spencer dropping0.6 percent.

DAY AHEAD

We have another very quiet day for data in the UK today.

In Europe, German inflation data set to be released at 13:00 GMT is perhaps the most likely to move markets. Expectations are for a slight gain in HICP inflation to 0.9 percent year-on-year, however risks lie to the downside with the recent sharp declines in oil prices likely to be a factor.

US GDP figures are expected at 12:30.Expectations are for a significant drop from the 4.6 percent expansion in the second quarter, with consensus estimates pointing to a decline to a still-robust 3 percent in the third quarter.

UK POLITICS

The latestEconomist/ Ipsos MORI October Issues index published yesterday shows an increase in concern about the NHS, though immigration is the most important issue facing Britain.

Ipsos1

The survey showed NHS is the most important issue facingBritain according to women

This month’s issues index shows that two fifths (40%) of the public mention immigration amongst the most important issues facing Britain.

For a quarter (23%), it is the single most important issue facing Britain. Concern rises with age, from  31% of those aged 18-34 to half (50%) of those aged 55+.

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