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Wednesday, 4 January 2012

US Interest Rate Unchanged: Cable Unchanged

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The Pound and the Dollar remain flat at 1.562 on mixed data released today; Mortgage Approvals, Consumer Credit and PMI Construction rose higher than consensus, but Net Lending and Money Supply sunk further below expectations.

Mortgage Approvals for November were expected to reach 52.800K but the improved figure saw a result of 52.854K. Construction PMI grew to 53.2 in December, following on from November’s figure of 52.3, whereas analysts had expected a drop to 52.0. Consumer Credit rose from £0.1 billion in October to £0.4 billion in November, slightly higher than the forecast figure of £0.3 billion.

Net Lending was slashed in half from £1.2 billion to £0.6 billion between October and November; analysts had only predicted a drop of 25%. M4 Money Supply fell 0.6% in November marking a further decrease from October’s drop of 0.3%.

The data is largely positive with PMI Construction improvement offering a glimmer of hope that the UK may not slip back into contraction, but the negative figures keep economic optimism in check. Yesterday the Federal Open Market Committee (FOMC) Minutes were released documenting absolutely no change in the US interest rate. The report also highlighted a new communication strategy that aims to increase transparency in the future by publishing individual FOMC member’s interest rate forecasts as part of the Minutes report. A discussion showed that a number of the members were in favour of additional policy accommodation, but that enhanced communications were necessary first.

Later today US Factory Orders are set to increase from -0.4% to 2.0% surplus in month on month figures for November and Total Vehicle Sales are expected to fall from 13.63M to 13.50M in December. MBA Mortgage Applications fell by -4.1% in December, but these figures have a decidedly muted affect on overall market sentiment. The Sterling to Dollar rate has been characterised by mild fluctuations in favour of the Pound so far this week and looks set to continue in a similar vein until the weekend.

Cutting Edge Current Affairs Courtesy of:
Josh Ferry Woodard 

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