ECB to Ease Policy Further as Inflationary Concerns Sudside

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GBPUSD - U.K. jobless claims rose another 31.8K in September following a 35.7K increase in the prior month, while the claimant count rate inched higher to 2.9% from 2.8% as widely expected. As a result, the unemployment rate rose to its highest level in eight years as the ILO index jumped to 5.7% from 5.5% July. In addition, manufacturing costs surged to a six year high of 2.6%, indicating that the downturn in the economy may last for a protracted period of time as foreign and domestic demands falter.

EURUSD - Consumer prices in the Euro-Zone rose 0.2% in September after falling 0.1% in the prior month, which was slightly higher than the 0.1% gain projected by economists. Meanwhile, the annual rate of inflation slipped to 3.6% from 3.8%, with the core CPI holding steady at 1.9% for the second straight month. In addition, the final CPI reading for Germany was confirmed at 2.9% as widely expected. The data suggests that upside price pressures have diminished since the first half of the year, and only strengthens the argument that the ECB will lower the benchmark interest rate further as growth prospects deteriorate.

USDJPY - Japanese industrial production plunged 6.9% in August to hit a new record low as fading demands from the global economy pushed manufacturers to cutback on production. Meanwhile, capacity utilization fell 3.47% after rising 1.37% in July, and conditions may only get worse as economic activity stalls throughout the globe.

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