Daily Insight

Markets drifted on lack of data yesterday, with a slightly weaker dollar being the pervasive theme. In contrast, today is packed with releases, most importantly the ECB press conference at 13:30. Claude Trichet is expected to make hawkish comments on inflation and interest rates, with some analysts now giving 50/50 odds of a quarter point rate rise in December. If Trichet fails to confirm his bullish attitude to rates, the Euro could come under pressure. There is some expectation now built into the market.

US figures also 13:30, with ISM (non-manufacturing) and factory orders at 15:00.

The non-manufacturing ISM surveys nearly 400 firms from 60 sectors across the United States, including agriculture, mining, construction, transportation, communications, wholesale trade and retail trade, and as such is a good barometer of the US economic backdrop. We are expecting a reading of 57.0. A stronger figure would be further evidence of inflation, and it will be interesting to see if the dollar still reacts to this, or whether the inflationary outlook is now priced into the market.

GBP EUR - Support 1.4680 then 1.4645
Resistance 1.4725 then 1.4775

GBP USD - Support 1.7720 then 1.7605
Resistance 1.7772 then 17816

DATA: ECB!!!!!.....Decision at 12:45 and press conference at 13:30
Non-farm productivity and Jobless claims at 13:30
Factory orders and ISM at 15:00