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German retail sales for February have fallen 0.2% against the consensus of a rise of 0.2% this morning reinforcing the weak sentiment in Germany. Yesterday we saw unemployment levels rise to 8.6% as the powerhouse of Europe comes under real pressure- this will heighten the cause for more action from the ECB tomorrow. Today, news from [...] Yesterday’s much anticipated 0.5 % cut by the BoE was greeted with derision from savers. However the currency markets reacted in a positive manner, continuing to buy Sterling – pushing it to a two month high against the Euro to €1.15 and above $1.45 against the dollar. Sentiment is key and for the moment the markets [...] EuroSat reported yesterday that Industrial Production in the Eurozone fell by a massive 7.7% in the past year to November following a downward revision to 5.7% for October. The Euro stuttered and fell as traders were taken aback by suddenness and size of the European economic slowdown. German data added to the gloom with a [...] With data from Germany hurting the currency ahead of the ECB Meeting tomorrow, the German GDP figure for 2008 came in exactly as the market had anticipated at +1.3% but the fall from +2.5% the previous year still made unpleasant reading. The workday adjusted number (whatever that is!) was even worse with a reduction from [...] As the market expected the ECB tweaked deposit rates to encourage more interbank lending. The ECB cut the rate it pays to deposit overnight money and increased the rate it charges for emergency loans. The concern from the ECB is that whilst they have slashed their base rate at the fastest pace in the ECB’s 10 [...] but it is Sterling that continues to bear the brunt of investor’s concerns. The headline in the The Times this morning caused a quick skip in the heartbeat, “Banks under the cosh as £1 tumble towards Euro 1″. Loan Calculator wondered what on earth had occurred overnight !!! As it happened, the headline was very much [...] But neither having a materially long-term effect on exchange rates. The market perception of lower interest rates to come remains unchanged in the market but differences of opinion as to magnitude of cut and timetable are starting to emerge. Comments from Trichet and Andrew Sentence yesterday added to the uncertainty with the former intimating a [...] In terms of volumes and liquidity left us trading very tight ranges yesterday and with tradition dictating an early close today in the US equity markets and with a lot of the rest of the workforce extending the holiday into the weekend, we are destined for another quiet one. There is also very little data [...] For those of you who have been away on a desert island for the past few weeks, today sees the UK Chancellor unveil his Kick Start for the economy thinly disguised as his pre-Budget Statement. It is difficult to ascertain just how much of the recent press coverage is actual and how much is speculative. [...] Headlines, reading that 4,000 UK jobs were lost yesterday, have produced a raft of new estimates as to where the total number of unemployed will get to before this recession ends. The consensus is that we will see a total in excess of 2 million imminently but from there it is anyone’s guess. If anything, [...] Registered Office in England, 24 Charlton Drive, GL53 8ES, UK- 3506015 • Data Protection Registration Number- PZ5407728
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