The European Central Bank (ECB) rules the roost today as ECB officials hold their policy meeting in Frankfurt. Chief, Mario Draghi, is expected to reassure the market about the bank’s bond purchase programme after a report of a possible abrupt end to quantitative easing unsettled markets earlier this month.

In the UK, retail sales came in flat for September. Later, the US economic docket features the release of weekly jobless claims, Philly Fed manufacturing index and existing home sales data. Separately, the Democrat presidential nominee Hillary Clinton beat her Republican opponent Donald Trump once again when they went head-to-head in their final presidential debate yesterday.

Pound Sterling – UK Markets

The Pound has extended its previous session losses against the US Dollar and the Euro this morning. The just out data showed that UK’s retail sales registered a flat reading for September and on an annual basis rose less than expected. This could translate into a fairly positive 3rd quarter for Britain.

Yesterday, Sterling briefly pushed higher against the greenback, racing above the crucial 1.23 mark, after the release of UK’s robust employment report. The nation’s unemployment rate remained at an 11-year low level of 4.9% during the 3 months to August, suggesting that the labour market was largely unaffected by Britain’s June decision to leave the EU. Further, claimant count rose less than expected in September. However, average weekly earnings slightly fell during the 3 months to August. The jobs report closely followed on the heels of UK’s inflation report which showed that the cost of living rose at its fastest rate in 22 months in September. Rising unemployment along with an upsurge in inflation could have spelt a recipe for disaster, which was fortunately averted.

US Dollar – US Markets

Yesterday, the greenback traded modestly higher against the Pound and the Euro after macroeconomic data indicated that the US home builders received more than anticipated permits in September, suggesting that residential construction will pick up in the coming months. In addition, the MBA mortgage applications increased in the last week. On the contrary, new home constructions declined for the 2nd straight month due to a plunge in the volatile multifamily category. In the session ahead, the US Fed released its summary of commentary on prevailing economic conditions, stating that the nation is on track for modest growth despite prevailing uncertainty around the upcoming presidential election. The survey revealed that the labour market continued to remain tight and wage growth was steady. Separately, the New York Fed President, William Dudley, stated that he expects an interest rate rise before this year end.

This morning, the US Dollar is trading higher against most of its major counterparts. Later, market participants will keep a close eye on initial jobless claims and Philadelphia Fed manufacturing data.

Euro – European Markets

The shared currency is trading higher against the US Dollar and the Pound this morning. Data released earlier in the session showed that German producer prices declined further in September. On the other hand, the Eurozone’s seasonally adjusted current account surplus widened to a 3-month high level in August. Moving ahead, today is crucial as the ECB is set to announce its monetary policy decision. While the central bank is widely expected to maintain the status quo at this meeting, focus will be on the ECB President, Mario Draghi’s speech. Market participants want clarity on the central bank's plans after they were spooked by talks of an end to its stimulus programme.

Yesterday, the Eurozone’s construction output declined in August. This was the 1st monthly contraction since March, as there was a decline in both building and civil engineering works.

Other Currencies – Highlights

It is a turbulent day for the Australian Dollar today. The domestic currency surged above the 0.77 mark against the greenback to hit a 6-week high yesterday, buoyed by a steep rise in oil prices. However, the Australian Dollar slumped against the US Dollar this morning, after the release of Australia’s disappointing jobs data. The number of employed people in Australia unexpectedly declined in September, pulled down by a plunge in full time jobs. On the other hand, part time jobs overwhelmingly advanced during the same month.

Meanwhile, the nation’s unemployment rate surprisingly slipped to 5.6%, as fewer people looked for work. The Australian job market has strengthened gradually, but there has always been a bias towards part time job creation. The Reserve Bank of Australia Governor, Philip Lowe, stated this week that the case to move more quickly with interest rate cuts would be strengthened in a world where the labour market is deteriorating. In other economic news, Australia’s NAB business confidence index registered a rise during the 3rd quarter.