Market Brief

      Gold has once again outshone other assets classes by powering to new highs above $1152, bringing the gains month-to-date to an astounding +10.2%. The move has been paralleled by rallies in most major and EM currencies against the USD (albeit to a less impressive extent), however underlining the disintegration of recent correlations, equity markets have put in a rather mediocre performance on the whole.

      The major news event of the morning was the publication of the Bank of England Minutes; revealing the recent decision to expand QE by GBP25bn was in fact determined by a 3-way split vote. Seven members were united in agreeing to the headline 25bn figure, but MPC member Dale voted for no further expansion to the existing 175bn asset purchase target, whilst David Miles wanted a larger increase of 40bn to bring the total to 215bn. While the latter figure may seem peculiar, it seems MPC member Miles was trying to propose a figure that would ensure the rate of asset purchases would remain constant going forward; indeed one of the explanations for the sharp GBP rally following the original meeting was the calculation that 25bn signified a slower pace of purchases and possible sign of an end to the stimulus programme. GBPUSD dropped 50 pips from 1.6825 to 1.6775 on a knee-jerk reaction to the vote details, and also to the mention that lowering the bank deposit rate may be useful in the future. The pair quickly returned to pre-announcement levels, but strong demand for EURGBP throughout the afternoon has ensured GBP has struggled in the subsequent part of the session, and is one of the few currencies lower against the USD on the day at 1.6750.

      The release of US CPI figures confirmed an uptick in inflation from its depressed levels, posting a better than expected 0.2% MoM gain that dragged the annualized figure up to -0.2%. The event had limited effect in the currency markets; as yet again, policy-maker rhetoric stole the headlines. St Louis Fed President James Bullard (non-voter) was quoted on newswires as saying the Fed may not start to raise rates until early 2012. The comments were perceived as dovish from a member who is usually considered to be a centrist with hawkish tendencies. Although the end result of today’s events have put the USD back under pressure, most currency pairs have so far not threatened a break-out from defined trading ranges.

    Tomorrow we await the release of yet another important piece of UK data, with Retail Sales for October estimated to have increased 0.5% MoM after last month’s disappointing 0.0% reading. With the week’s major data events winding down, this will be the last scheduled risk event capable of pushing GBP beyond technical levels towards either 1.7000 upside resistance or 1.6650 downside support, however the lessons of the last few days have shown that range bound price action is stubbornly ensconced, and the most market-moving events have been the unpredictable headlines from official speakers..

G10 Advancers and Decliners vs USD
 Global Indexes Current Level % Change
FTSE 100 Index5'348.90+ 0.06
DAX Index5'795.97+ 0.30
SMI Index6'377.12+ 0.01
S&P 500 Index1'106.59- 0.34
DJIA Index10'394.64- 0.41
Nikkei 225 Futures9'690.00- 0.51
Hang Seng Futures22'767.00- 0.48
 World Markets Current Level % Change
Gold1'147.50+ 0.54
Silver18.67+ 1.33
VIX22.38- 0.13
Crude wti80.05+ 1.15
USD Index74.94- 0.51
 Todays Calender Estimates Previous Country / GMT
Thu 19 Nov---------
Trade balance, CHF bn (nsa) Oct1.501.91CHF/07:15
Unemployment rate, % Oct8.48.3SEK/08:30
PSNB (PSNCR), £ bn Oct4.019.4GBP/09:30
Retail sales, % m/m (y/y) Oct0.5 (2.9)0.0 (2.4)GBP/09:30
M4 money supply, % m/m (y/y) Oct1.0 (9.9)0.8 (11.6)GBP/09:30
Initial jobless claims, thous 14-Nov504502USD/13:30
Continuing claims, thous 7-Nov55955631USD/13:30
Wholesale sales,% m/m (Sep)1.0-1.4CAD/13:30
Leading indicators, % m/m Oct0.71.1CAD/13:30
Philadelphia Fed manufacturing index Nov12.211.5USD/15:00
Leading indicators, % m/m Oct0.41.0USD/15:00
Currency Tech

R 2: 1.5060
R 1: 1.5045
CURRENT: 1.4880
S 1: 1.4815
S 2: 1.4785

R 2: 1.7040
R 1: 1.6845
CURRENT: 1.6755
S 1: 1.6515
S 2: 1.6400

R 2: 90.85
R 1: 90.60
CURRENT: 89.40
S 1: 88.75
S 2: 87.10

R 2: 0.9475
R 1: 0.9405
CURRENT: 0.9300
S 1: 0.9210
S 2: 0.9190

R 2: 1.0800
R 1: 1.0660
CURRENT: 1.0500
S 1. 1.0410
S 2: 1.0380