As Sam discussed in yesterday’s report, the Pound had a rough ride after the economy was seen to have shrunk in Quarter 4 but the minutes from the last Bank of England meeting revealed that two of the members wanted an interest rate hike to slow the economy. They wouldn’t have seen the GDP numbers before that meeting so I wonder what their views would be now. I know that Andrew Sentence will still be hawkish buy new member Martin Weale may not be quite so convinced. The governor of the BOE, Mervyn King is in the headlines warning us that we are back to the 1920s as far as thrift and belt tightening is concerned. Thanks Merv; we didn’t know. What with inflated mortgage rates compared to the base rate, higher energy costs, higher food costs, higher transport costs, lower wage rises benefits squeezes and a harsh winter, we all thought things were peachy.

Aaaanyway, the markets’ take on the UK data was that the Pound suffered; falling to the support levels mentioned in the report earlier in the week. However, the Pound has found a bit of respite in the fact that UK interest rates are likely tore main low for an extended period and perhaps the realisation that things aren’t a lot better anywhere else.

Hat perhaps should exclude the Eurozone. Strong figures from Germany seem to be all traders need to encourage them to buy Euros at the moment; hence the Euro - US Dollar rate is at the top of its range and the pound is still struggling to recover against the Euro. Today’s barrage of German inflation figures and the official EU consumer & industrial confidence surveys may well keep that pressure on.

We also get US durable goods and pending home sales data today; both have been influential in recent months and both could be market moving today. US Dollar seller may want to act this morning to avoid any spike in the value later in the day because we think these numbers may well be rather good.

Overnight tonight brings a rash of Japanese data and that is likely to have an effect t on the Australasian Dollars in particular, so anyone with Australian or New Zealand Dollars to buy should be looking at placing an overnight order in the market to see whether they can grab some cheap Dollars in the market turmoil.

However, many traders could be sitting on their hands ahead of tomorrow’s US economic growth data. Remember that some parts of America had blizzards as well during December so a drop in output is highly likely. Whether the impact was as great as the 0.5% cut in growth that has been attributed to the poor UK weather is another matter entirely but be prepared for poor numbers.

In the meantime, a number of newspapers have raised the debate over the football commentators’ sexist comments by suggesting that it seems to be acceptable to be sexist against men but not women these days. Advertisers certainly think so; there’s the one where two women with colds meet in the street to discuss all the things they have to do whilst one is buying pills for her husband who has in bed with a bit of a cold, “Ahh bless” they both say. There is the one where the woman hits the ejector button on her sofa to get rid of her ‘pain’ bloke and countless others which depict men as incapable of doing anything which doesn’t involve football, drinking or eating and men certainly can’t operate domestic equipment in the eyes of the advertisers. The thing is that most blokes laugh at this stuff along with the women the advertisers are aiming to lure with their humour but I kind of think it would be a brave ad man who tried to take the Mickey out a woman for not knowing the offside rule or not being able to drive or park well. I have no scientific way of knowing but I kind of think there would be uproar. It’s an interesting debate don’t you think.


Quote

Nobody will ever win the battle of the sexes. There's too much fraternizing with the enemy.
Henry Kissinger