Entering choppy waters

Today’s news headlines:

‘Confidence rises among Europe’s cash-rich consumers'. The European Commission’s monthly survey of consumers found that confidence rose to a six-month high in September, despite a resurgence in fresh virus cases across some countries. In a further sign of positivity, the European Central Bank said that households mostly hoarded cash earlier in the pandemic because they had little opportunity to spend it. Despite the savings rate in the first three months of 2020 reaching the highest level since 1999, only a small proportion was saved by those worried about the prospect of job losses. (Financial Times)

‘UK economy faces gloomy fourth quarter’. Ahead of the new measures introduced by the Prime Minister on Tuesday, the latest indicators suggested that growth in consumer spending had already slowed sharply in September, signalling more gloom for the UK’s economy in the coming months. A rise in cases, along with the end of popular programmes such as the ‘Eat Out to Help Out’ scheme contributed to the end of a late-summer surge in activity in the hospitality sector. The UK’s quarter three growth is expected to be around 15%, which leaves output 10% lower than at its 2019 peak. (Financial Times)

Today's events, rates, and data 

  • Investors continued to pile out of riskier currencies and into the Dollar throughout the overnight session over fears of a second lockdown in the UK and Europe. The Australian Dollar hit a six-week low on growing expectations that the Reserve Bank of Australia might cut rates as soon as next month. Meanwhile, US and European equity futures point towards gains in today’s session.

Today's events

NZ RBNZ Official Cash Rate announcement: 0.25% vs 0.25% previously
French Flash Services and Manufacturing PMIs: 47.5 vs 51.5 previously, 50.9 vs 49.8 previously, respectively. 
German Flash Services and Manufacturing PMIs: 8.30am
Eurozone Flash Services and Manufacturing PMIs: 9.00am
UK Flash Services & Manufacturing PMIs: 9.30am
US Federal Open Market Committee member Loretta Mester speaks: 2.00am
US Flash Services and Manufacturing PMI: 2.45pm
US Fed Chair Powell Testifies: 3.00pm
US Crude Oil Inventories: 3.30pm       

Interbank rates:

GBP/USD: 1.2695
GBP/EUR: 1.0865
EUR/USD: 1.1685
USD/CAD: 1.3335