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Meanwhile the dollar index saw sideway movements on Thursday and was last seen holding above the 97.000 figure.
The bemoaned eight consecutive sessions of decline on the S&P 500 has taken place with the latest close of -0.44% on Thursday. Nevertheless as we have highlighted, none of these eight sessions thus far has clocked more than 1.0% losses and could really be attributed to risk aversion ahead of the US elections instead of a more worrying case of panic from a crisis. From a market point of view, both candidates could represent uncertainty ahead in terms of policies. However, even more importantly, it is their influence over the interest rate path for the US economy that will have a more direct near-term impact on the markets.
Overnight we have also seen the slide in the USD index stall ahead of the 97.000 figure. Mixed data arrived from the US with better than expected September factory orders at 0.3% MoM while durable goods orders missed at -0.3% MoM. Notably, third quarter US non-farm productivity (prelim.) has risen to 3.1% QoQ, the highest in two years. Consolidation can be seen ahead of the non-farm payrolls data due today. However, the impact could be limited, as we have temporarily departed from the influence of economic indicators and we are currently stuck in a sentiment-driven climate.
The main action overnight came from the UK where the high court ruled that the government does not have the authority to trigger Article 50 of the Lisbon Treaty for UK to commence the departure from EU. Furthermore, the Bank of England left key interest rates unchanged and raised the growth projection to 2.2% for 2016 and 1.4% for 2017. The cumulative effect brought GBP/USD up more than 100 pips to the highest levels seen since the flash crash in early October.