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Daily World Market Update

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Banks Dive Lower With Sterling Volatile Before BOE

Wed, Nov 4 2009, 11:50 GMT
by Jeremy Cook

World First UK Ltd

All this and more is available on our video blog

Falls on equity markets continued to strengthen the US dollar with haven flows increasingly markedly. Equities, commodities and high yielding currencies, which in the past month had all been bought heavily against the weak dollar, were sold again yesterday with the banking industry at the centre of most people’s fears.

News from RBS, Lloyds and UBS all disappointed the market and led speculators to query whether this recovery is nothing more than a false dawn. Weakness for the banking sector also means weakness for the pound although it managed to gain strongly against the euro.

Such is the nature of the markets at the moment that trying to pick a prediction path is almost impossible. Construction PMI for the UK once again was in contraction yesterday but today we really get the big hitter.

The UK services PMI figure, due at 09.30, is the most important of the PMI releases as we are an increasingly service based economy. Today’s figure should be able to shine more light on the belief that the ONS’s GDP figure will be appraised upwards in the weeks to come. If it moves back into contraction I.e. Below a level of 50 then some credence would be given to that disastrous growth figure of -0.4%.

UK services PMI apart we have a very busy data day. The Fed announce their interest rate policy at 19.15 and while a hold is all but assured the accompanying statement should read that economic conditions “…warrant exceptionally low levels of the federal funds rate for an extended period…,”

We also have BRC shop prices, ADP employment change and US ISM Non-Manufacturing today.

Latest Exchange Rates At Time Of Writing

Published on  Wed, Nov 4 2009, 12:02 GMT