Daily Afternoon Report 25/10/2012

Earlier Thursday, the Reserve Bank of New Zealand kept its benchmark interest rate unchanged at 2.5%, marking Governor Graeme Wheeler's first decision as head of the central bank, after replacing Alan Bollard in late September.

The preliminary release of the UK Q3 GDP came in much stronger than expected causing EUR/GBP to plunge, while GBP/USD rose.

The euro extended its correction versus the dollar after the jobless claims drop as well as the durable goods orders rise to more than expected levels.

Elsewhere, the yen remained broadly weaker amid mounting speculation over the possibility of more easing by the BoJ at its upcoming policy meeting on October 30.

Daily Morning Report 25/10/2012

The Great Britain pound advanced on hopes that the United Kingdom will emerge from recession. Traders turned their attention to the GDP report, released today, which is expected to show growth of 0.6% in the Q3. BoE Governor Mervyn King appears to be softening the tone on monetary policy.

German and French manufacturing data disappointed markets with PMI reporting under forecast, followed by a slew of other German data all under forecast and the EU manufacturing PMI also under forecast.  Reports are surfacing that officials from the European Union, European Central Bank and the International Monetary Fund rejected Germany’s proposal to tighten Greece’s access to the established financial aid account. With this proposal out of the way, the market is pricing in the possibility that Greece will eventually get its next tranche of aid. 

Canadian Dollar strengthened against its U.S. counterpart boosted by a hawkish statement from the Bank of Canada on Tuesday that stands in stark contrast to most other developed economies. The central bank was expected to set the currency’s direction for a second straight session, with Bank of Canada Governor Mark Carney holding a news conference following the release of its Monetary Policy Report later on Wednesday.

US new Home Sales surprised markets with a strong upward report coming in above forecast at 389k against 385k supporting a US recovery