Euro Pounds Daily Brief – 6/11/2006
Summary of Overnight News:
• The FTSE-100 looks to start the week on a cautious note with IG Index predicting it to open 1 point down
@ 6,147, as Wall Street slipped below the key 12,000 level on Friday and as investors stay cautious ahead
of Thursday's rate decision.
• The DJIA ended off 32.5 points at 11,986.04, the Nasdaq Comp fell 3.23 at 2,330.79 and The S&P 500 was
off 3.04 at 1,364.30.
• Meanwhile, Wall Street finished the week under pressure, as a spike in the price of oil and a mixed set of
job data added to jitters over the health of the world's largest economy.
• The Labor Department revealed the unemployment rate hit a five year low, but enthusiasm was tempered as
non-farm payrolls missed market forecasts.
• Back in London, Thursday's rate decision will take centre stage with investors braced for the MPC to raise
borrowing costs to a five-year high in a bid to counter above-target inflation.
• All 35 economists polled by top news agency AFX News expect the MPC to raise its key repo rate by a
quarter point to 5.00 pct, its highest level since before the September 11, 2001 terrorist attacks in the US.
• Over in Asia the Nikkei 225 index closed 14.74 points firmer at 16,364.76, while the Hang Seng was up
62.68 at 18,812.37 by midday.
• Still in Asia, oil prices eased, pulling back from a sharp jump late last week sparked by threats against oil
installations in Nigeria.
• Earlier this morning, New York's main contract, light sweet crude for December delivery, was down 35
cents to $58.79 a barrel from $59.14 in late US trade Friday when the contract had jumped $1.26 .
UK
Figure out Today:
• 0930 Industrial Production, (Sep) % mom Prev 0.1 Exp 0.7
• 0930 Industrial Production, (Sep) % yoy Prev 0.7 Exp 1.0
• 0930 Manufacturing Production, (Sep) % mom Prev 0.4 Exp 0.3
• 0930 Manufacturing Production, (Sep) % yoy Prev 1.5 Exp 2.4
Europe
Figures out Today:
• 0900 EA PMI Services (Oct) Prev 56.7 Exp 57.0
• 1000 EA PPI (Sep) % mom Prev 0.1
• 1000 EA PPI (Sep) % yoy Prev 5.7
EURO USD @ 1.2703 GB POUNDS USD @ 1.8983 GB POUNDS EURO @ 1.4942 USDJPY @ 118.17

Tuesday 7/11/2006

• Dollar holds firm on political stand off
• China forex reserves hit $1,000bn
• Caution as the market waits for UK rate rise
• Japan signals pre-emptive rate rise
• ECB member warns of ‘alarming inflation’
• Oil gains ground on OPEC production cut warnings

US Dollar:

The dollar initially hit one month highs late Monday on fears of a political stand-off in the US. With polls
showing the republicans trailing ahead of today’s mid-term elections, a Democratic win could boost the
dollar. This would effectively make Bush a dead duck and ‘limit his ability to crank up global geopolitical
risk’, commented an ING economist.
Meanwhile gains were pared as Bank of Japan governor Fukui said that the central bank would act pre-emptively
to quell any incipient spike in inflation. The market took the comments on board and consequently
bought the yen against the dollar.

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