Markets struggle to gain direction after convictionless overnight session

A quiet day of data releases and macro events yesterday fed into a convictionless session overnight that we expect to see continue when the European market opens.

UP

AUD and NZD were the best performers overnight. AUD gained 0.33 percent to USD0.8831.

Gold and copper both clawed some gains overnight. Gold was up 0.19 percent to USD1,229 after trading sideways most of the day. Copper prices were up 0.15 percent to USD306.85 after a similar story.

DOWN

JPY lost ground despite stronger September retail sales figures. Year-on-year retail trade numbers grew 2.3 percent,overshooting expectations of just 0.6 percent after a 1.2 percent gain inAugust.

DAY AHEAD 

We have another very quiet day of macro announcements on the cards. Perhaps the most important announcement of theEuropean session is the Swedish Riksbank rate announcement due at 8:30 GMT.Expectations range between a cut of 10 to 25 basis points. But with rates already so close to zero, a cut has already been largely priced in by markets. Instead, the focus will be on any unconventional policy measures the Riksbank may pull out of the bag, with any stimulus measures announced likely to give the SEK some gains in the short term.

UK POLITICS

After Douglas Carswell’s defection to Ukip and his successful by-election result in Clacton with over 60 percent of the vote, Mark Reckless remains the favourite to take repeat the result inRochester on 20 November. However, despite the most recent poll from ComRes giving Ukip a 13-point lead, Rochester and Strood has a very different demographic to Clacton and it is likely that he will face a much bigger challenge if he wants to join Carswell as the second Ukip MP in parliament.

William Hill currently has Reckless at 1/8favourite to take the Rochester by-election, while Conservative candidate Kelly Tolhurst is being offered at 9/2. Labour have no hope of taking the seat, and are offered at 33/1.