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Financial update; 27/10/10

Good morning everyone,

Here is your daily financial update:

Financial Focus
Wednesday 27h October Protected content

UK growth is double the forecast at 0.8%; US trade figures better than expected; Aussie dollar slumps after surprising tame inflation data.

Taken aback by the UK’s 0.8% Q3 growth, investors seem to be weighing up the likely influences on the FTSE Protected content wider indices. With little economic and corporate news due out today, it is likely that they will watch and wait, persuading analysts that the FTSE Protected content move back below 5,700. Global markets are also struggling for momentum, although the US indices managed to post small gains in the last session.

The British pound surged as quantitative easing worries fell away on the back of the UK GDP news yesterday. The currency was further strengthened by Standard & Poor’s confirmation of Britain’s AAA credit rating. The dollar gained against the majors in Asian trade, buoyed by a second day of good economic data out of the US. The Aussie dollar was the loser, sinking against most currencies after their Q3 Consumer Price Index fell short of expectations.

UK gilt yields spiked strongly yesterday after the UK’s strong Q3 growth. Prices on all longer dated gilts are more than £1 lower, while the Protected content has dropped 73p. Charteris’ Ian Williams, manager of the £100m City Financial Strategic Gilt fund, is warning investors of dramatic losses for the asset class, advising them to ‘batten down the hatches’.

A predicted surge in U.S. crude inventory data dragged down oil prices in Asian trade on Wednesday. New York's main contract, light sweet crude for delivery in December, shed 30 cents to $82.25 a barrel. Brent North Sea crude for December delivery dipped 24 cents to $83.42.

Precious metal prices ended mixed yesterday at Comex. Gold prices ended marginally lower after a volatile day of trading, but silver zoomed ahead of gold and ended with decent gains. Prices were a bit volatile today following the dollar firming up and erasing all of its prior day's losses.

Index; Value, Change

DJIA; Protected content , +5.41, +0.05%
Nasdaq; Protected content , +6.44, +0.26%
S&P 500; Protected content , +0.02, +0.00%
FTSE 100; Protected content , -44.68, -0.78%
FTSE 250; Protected content , -37.42, -0.34%
Nikkei 225; Protected content , -0.20, +0.00%

FOREX PRICES AT Protected content
Pairing; Value, Change

USD/JPY; 81. Protected content , +0.33%
EUR/USD; 1. Protected content , -0.25%
GBP/USD; 1. Protected content , -0.09%
EUR/GBP; 0. Protected content , -0.17%

COMMODITY PRICES AT Protected content
Commodity; Value, Change

Comex Gold; $1338.30, +$0.10, 0.0%
Brent Crude Oil; $83.42, -$0.24, -0.3%

This information is prepared solely for informative purposes, under no circumstances should it be relied upon as a source of investment advice.