· Overnight US data was upbeat, led by strong job data. Jobless claims dropped more than forecasted by 20k to 512k WOW adding to sign the job market is improving as the economy begins to gain pace. Further, worker productivity surged as labor costs fell and unemployment claims were lower, driving hopes that it will boost corporate profits.
· BOE and ECB continued to keep key rates at a record low on concerns that economies remain too fragile to remove stimulus measures. However, BOE raised asset purchases by GBP25b to GBP200b, GBP25b less than predicted, as the UK economy continued to contract through Oct, signaling recovery may be put on hold.
· Economic indicators showed that UK manufacturing output and IPI rebounded more than expected in Sep as rising confidence combined with sterling weakness appears to be supporting the recovery. However, European retail sales declined more than expected in Sep as consumers cut spending amid rising unemployment, suggesting the weak consumer sentiments are unlikely to head the recovery.
· Meanwhile, economic optimism in Australia were boosted by a statement by RBA saying that the economy will expand at more than three times the pace forecast in Aug, and signaled it will continue to lead the world in raising interest rates. Overnight data showed that building industry rose 0.1 pts to 50.9 in Oct, supporting views of strengthening economy.