Opening Market Overview

Italian Industrial Production m/m 0.5% 0.3% 0.2%

GBP Manufacturing Production m/m 0.4% 0.4% 1.2%

GBP Trade Balance -9.7B -9.3B -10.1B

GBP Industrial Production m/m 0.4% 0.4% 0.9%

UK Factory Output Rises, Trade Disappoints

LONDON--Factory output in the U.K. rose in October but Britain's trading performance continued to disappoint, official data showed Tuesday, underscoring the challenge facing policy makers eager to see a rebalancing of the British economy towards exports and away from consumer spending.

The Office for National Statistics said manufacturing output rose 0.4% between
September and October, an increase that helped drive a 0.4% pickup in overall industrial production. The output of the U.K. manufacturing sector was 2.7% higher in October than a year earlier, the ONS said, the largest annual growth rate since May 2011.

The rise in activity was led by the manufacture of cars, aircraft and other transport equipment, which reached its highest level in October since records began in 1968, the ONS said.

The pickup in industrial production may reassure policy makers that an economic recovery fueled largely by consumer spending and a revival in the housing market appears to be spreading to other parts of the economy.

But the upswing at British factories in October wasn't reflected in Britain's trading performance. Although the U.K.'s deficit in trade in goods with the rest of the world narrowed in October to 9.7 billion pounds ($15.9 billion), a bigger shortfall than analysts were expecting.

Moreover, September's goods trade deficit was revised up to GBP10.1 billion, not far off a record GBP10.3 billion deficit recorded in April 2012, and Britain's deficit in goods trade with the European Union hit a new record in October of GBP6.5 billion.

The data show the aim of tilting the British economy towards exports and investment and away from consumer and government spending remains a distant prospect.

Economists have expressed concern that Britain's economic recovery appears overly dependent on domestic consumption and a rapidly-improving housing market. The Royal Institution of Chartered Surveyors said Tuesday expectations for house price growth reached their highest in November for more than 14 years, according to a survey.

Emerging markets can deal with gradual Fed taper - World Bank's Kim

(Reuters) - Emerging markets could adjust to the withdrawal of the Federal Reserve's massive monetary stimulus as long as it happens gradually, World Bank President Jim Yong Kim said on Tuesday.

Fed chief Ben Bernanke shocked emerging markets in May when he raised the possibility that the U.S. central bank could soon embark on a draw-down in its $85 billion a month bond-buying program, known as quantitative easing.

"If the tapering happens over a longer period of time, gradually - which is what we would expect -- ... we think that the emerging economies, especially in the poor countries, can adjust," Kim told reporters.

End-of-day Market Overview