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Financial Focus: 29th October 2010

Unexpected drop in US jobless claims casts more doubt on US Quantitative Easing;
US GDP figures out today will give more guidance to the Fed ahead of next week’s meeting;
UK consumer confidence survey shows a surprising rise of one point.

London shares are tipped to start lower Friday, while investors adjust positions ahead of the weekend and next week’s U.S. Federal Reserve policy meeting. Ahead of the opening, IG Markets is calling the FTSE down 9 points at 5669, having gained 0.55% yesterday. US markets closed mixed, with the S&P 500 and Nasdaq both adding 0.1% in the last session.

Sterling is slightly up against the dollar and euro, but down against the yen – although this is in line with all other currencies on Friday. Sterling was supported by the surprising rise in the consumer confidence data just released, and now all eyes will be on the US GDP figures out later today.

Gilts may start a bit higher Friday, with uncertainty over the US Fed’s QE measures next week. “We’ve had a sharp sell-off in the last two days so the levels have invited a few people in,” says Marc Ostwald at Monument Securities. UK consumer confidence rose one point in October, largely on an improvement in how consumers view their financial situation over the coming 12 months, the polling firm GfK NOP reported Friday.

Crude prices were lower Friday as the dollar staged a slight comeback against the euro. “The US dollar has strengthened a bit against the euro and that correlates with the movement of oil prices,” said Victor Shum of Purvin and Gertz energy consultants in Singapore. Shum said the market was also eyeing next week’s US Federal Reserve meeting for indications of the scope of any new US stimulus plans.

Spot gold was down $3.90 at $1340.20/oz, in line with the euro’s dip against the dollar. Silver was steady at $24.01/oz, down just 2 cents. LME metals were down after a weak Shanghai open. LME 3-month copper was off 0.7% at $8285/ton and zinc was off 2.0% at $2444. Worse-than-expected Japan industrial output data also played in the market, while traders noted rising copper inventories in Japan.

DJIA: 11113.95 / -12.33 / -0.11%
Nasdaq: 2507.37 / +4.11 / +0.16%
S&P 500: 1183.78 / +1.33 / +0.11%
FTSE 100: 5677.89 / +31.87 / +0.56%
FTSE 250: 10848.83 / +21.55 / +0.20%
Nikkei 225: 9214.98 / -151.05 / -1.61%

USD/JPY: 80.55 / -58 / -0.56%
EUR/USD: 1.3898 / -00 / -0.23%
GBP/USD: 1.5945 / -50 / +0.06%
EUR/GBP: 0.8713 / -19 / -0.31%

Comex Gold: $1340.20 / -$1.90 / -0.1%
Brent Crude Oil: $83.43 / -$0.16 / -0.2%

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