Euro Pounds Daily Brief Friday – 03/11/2006

Summary of Overnight News:
• The FTSE-100 should open around 5 points lower this morning following a cautious performance last
night in New York ahead of today's US jobs report for October, with the volatile non-farm payrolls
number always a key focus for investors.
• The UK blue chip index closed 0.3 points easier yesterday at 6,149.3.
• Overnight on Wall Street, the DJIA closed 12.48 points weaker at 12,018.54, while the S&P 500 index
lost 0.47, to end at 1,367.34, and the NASDAQ composite index slipped 0.33 points to 2,334.02.
• New York stocks extended their recent poor run after further weak economic data, with news that US
productivity was flat in the third quarter, while wages rose nearly 4 %, touching off concerns that the
Federal Reserve will continue to wrestle with inflation, and possibly raise interest rates again.
• Today's main focus will be on the US jobs report, with economists expecting a 135,000 jump in US
non-farm payrolls in October, after a 51,000 advance in September, although the jobless rate is
forecast to remain static at 4.6 %.
• In Asia, Tokyo markets are closed for a public holiday today, while in Hong Kong the Hang Seng
ended its morning session 25.76 points lower at 18,689.02 on mild profit-taking after the benchmark
index hit fresh record highs yesterday.
• Meanwhile oil prices were little changed in Asian trade today on forecasts of a warmer northern
hemisphere winter which should dampen demand for heating fuel.
USA
Figures out Today:
• 13:30 US Non-farm payrolls, k Oct Prev 51 vs Exp 123
• 13:30 US Unemployment rate, % Oct Prev 4.6 vs Exp 4.6
• 13:30 US Average hourly earnings, %m/m Oct Prev 0.2 vs Exp 0.3
• 15:00 US ISM non-manufacturing Oct Prev 52.9 vs Exp 54.7
• US non-farm payrolls rose a disappointingly sluggish 51k in September, though benchmark changes
and a 60k upward revision to August left the recent trend increase of around 120k a month intact.
UK
Figures out Today:
• 09:30 UK PMI services Oct Prev 57.0 vs Exp 56.7
Europe:
Figures out Today:
• 10:00 EA Unemployment rate, % Sep Prev 7.9 vs Exp 7.8
• ECB statement boosts the Euro: The Euro advanced on Thursday after the European Central Bank all
but confirmed a further rise in eurozone interest rates next month. The ECB, as expected, left rates on
hold at 3.25 per cent after its policy-setting meeting. However, But Jean-Claude Trichet, ECB
president, used the magic words “strong vigilance” right at the start of his post-decision press
conference – a phrase that has prefaced all five of the interest rates rises in the current ECB tightening
cycle. If any further proof were needed, as to the ECB’s intentions, Mr Trichet rammed the point home
by stating that saying he would do nothing to alter current market expectations towards the path of
interest rates this year. Markets were fully pricing in a December move.
EURO US DOLLAR @ 1.2770 GB POUNDS USD @ 1.9065 GB POUNDS EURO @ 1.4930 USDJPY @ 117.10

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