As someone who lives much nearer to Crawley the Manchester, I guess I should probably be a Manchester United supporter but like, I suspect, a large part of the population, I was willing Crawley to upset the bookies on Saturday afternoon and at least force a return match. Ah well, the dream dies but the Crawley players will be able to hold their heads high because other than one fleeting moment, I think even Sir Alex would agree they were the better team on the day.

As for the financial markets, well there wasn’t too much concern for the bookies here last week. Some of the data releases were a little different to the market forecasts but the overall effect was pretty much status quo. Sterling had rather a good week overall but failed to capitalise on the gains and remains trapped below fairly long term resistance levels. UK retail sales saw a sharp rise in January after a snow bound December and Sterling rallied on the news but I can’t help feeling the Pound’s rise is a tad overdone n predictable news. In fact, that makes the Pound vulnerable to a bout of profit taking and those who sold Sterling in the last few days of last week have probably done themselves a favour as we head into the week. The big diary items are the release of the minutes from the last bank of England rate setting meeting on Wednesday and the 2nd calculation of economic growth for the last three months of 2010 which will be released on Friday. A drop in in the figure is forecast so Sterling is likely to weaken towards the Friday release and may continue to do so afterwards if the rumours are proven to be true.

The BOE didn’t have the 2nd estimate when they left interest rates on hold and Mervyn King did his best to justify the historically low interest rates while inflation is expected to make it to 5% this year so the minutes will make very interesting reading. We now know that Andrew Sentance voted for an interest rate hike and probably for a reduction in then quantitative easing package but his cries were almost certainly a solo performance rather than part of a chorus.

The weekend’s G20 meeting didn’t get the usual hype, I am glad to say and the lack of substantive progress on debt and growth really makes that a good thing. However, there was some progress on agreeing to reach agreement on certain items by April and whilst that may not sound like much improvement, it is a really big move for a G20 that generally appears to agree on very little.

Elsewhere, the US Dollar is weaker against the Pound this morning. It is Presidents Day in America so the markets there shut and that takes a lot of volume out of trading. There is a good chance that this weakness is a result of traders selling out of the USD ahead of the long weekend so US Dollar buyers should certainly look at their needs in the short term before the Dollar rebounds on nervousness surrounding events in Bahrain, Libya, Yemen etc. Friday brings the 2nd estimate of 4th quarter growth but little is expected in the way of revisions.

In the Eurozone, the general perception is of nervous tension. You know; the sort that brings on headaches and causes the actresses to frown a lot in TV adverts for pain killers. We are expecting higher French inflation and slightly better German business confidence data this week so the Euro may have a short term fillip but the longer term trend is, I believe, one of a weaker Euro and that is perhaps a warning bell for Euro sellers. This week brings the Irish parliamentary elections; that isn’t earth moving as far as the EU is concerned but the level of debt Ireland has owing to the EU and IMF does make it an issue worth watching.

The Australian Dollar and Canadian Dollar in particular, had a good week last week. Commodity prices are high and the demand from the US of A is good so why wouldn’t they. However, the New Zealand Dollar, which relies heavily on agricultural output for its overseas income, was less robust. In fact Sterling managed to peg the Kiwi Dollar back to the highest exchange rate we have seen in 6 months or so. We are slightly below those highs this morning but this is still an attractive level for NZ Dollar buyers ahead of all the UK data we will get this week and after we heard that Fonterra, the co-operative that manages most of New Zealand’s dairy output announced a substantial rise in earnings and therefore a substantial rise in payouts to NZ farmers.

And finally, I guess it had to happen but the town of Speed in Victoria, Australia has changed its name to Speedkills in order to promote road safety. I would guess that entering a town where the sign says ‘Speed’ tends to have an undesirable effect so changing it to Speedkills could work in reducing fast car incidents. However, they have perhaps missed a trick. If the ‘Speed’ instruction was working, then why not change the town name to ‘Spend’ or ‘Stop’ to boost the local economy. Maybe ‘Hungry’ would get people pausing for lunch and ‘Spend’ could work. People of Speedkills, I urge you to reconsider for the sake of the town’s prosperity.


Quote

A stockbroker urged me to buy a stock that would triple its value every year. I told him, "At my age, I don't even buy green bananas.
Claude Pepper