Happy Valentine’s Day everyone. I hope the one you love let you know they do too. We apparently all love Colin Firth for his portrayal of a stammering king. I still find it amazing how excited we are supposed to get over someone who can do good pretending. Obviously some people who do good pretending get locked up; Bernard Madoff and the people from Enron spring to mind, but if you do it on camera and call it acting, it is apparently the most amazing thing on the planet; more amazing than science or curing disease and clearly it deserves to be lauded and rewarded handsomely and occupy every front page in the land. It’s just good pretending you know.

Back in the real world, the amazing news that the people of Egypt have got rid of the president they didn’t want was greeted with a slightly more relaxed feeling around the markets. Everyone will be hoping that the old adage ‘beware what you wish for; you might just get it’ doesn’t apply to the Egyptian situation. Now that the Egyptians have succeeded, the people of Italy seem hell bent on ousting Silvio Berlusconi in similar street demonstrations. That would be a coup.

The market reaction to all of this has lacked vigour. The US Dollar weakened a tad as funds flowed out into higher yielding currencies and the Euro did likewise. Sterling failed to capitalise on those moves though because traders and investors are still wary of the UK economy. Tomorrow’s UK inflation may well be a decider in this. Many analysts are expecting yet another rise in the cost of living with the general view being that we will see a 4.4% Consumer Price Inflation figure. The Bank of England has tried to sound fine about higher inflation; suggesting it will fall back in line without higher interest rates because it is due to effects that the BOE can’t control any way. We shall see how they feel if inflation gets above double their target and get some hints from Wednesday’s release of their quarterly inflation report.

The other big news of the week is the release of the minutes from the last US Federal Reserve meeting. This happens on Wednesday and the interesting element will be the Fed members’ attitude to the economy. They are all clearly concerned about the labour and housing markets so that may come through in the minutes. Meanwhile the US Dollar is still susceptible to flows related to higher or lower risk taking amongst international investors.

For its part, the Euro is still eyed with suspicion by investors and traders alike. It is at the weak end of the scale against the USD and GBP and that is largely due to concerns over the structural deficiencies in the Eurozone structure and the apparent inability of the EU and IMF to ach agreement on reforms which would put a long term support package in place for the Euro. You have to think such a package wouldn’t be necessary if the structure of the Eurozone wasn’t compromised by the disparity between the various member states. On a separate note, the announcement that Axel Weber will leave the Bundesbank at the end of April was not market moving although the speculation over his replacement is rife.

Over the weekend the Australian Dollar has boosted by news that home loans advanced twice as fast as analysts had forecast and the Aussie Dollar is still attractive for its interest rate yield. It was also boosted by news that both imports and exports in China were up more than forecast; a comforting sign for Aussie exporters who have been worried about China’s stated aim of slowing the economy.

It’s near neighbour, the New Zealand Dollar though weakened as retail sales slowed again; dropping expectations of another interest rate hike from the Reserve Bank of New Zealand and causing concerns that the NZ economy is slowing more than expected.

Still on a Dollar theme, the Canadian Dollar is stronger as we start the week on news that Canada’s trade surplus expanded at a faster =rate than forecast in December. Higher commodity prices will have helped but it does increase speculation over an early hike in Canadian interest rates.

As usual, the third week of the month carries the fattest data diary so there is plenty to talk and write about this week; I’ll keep you updated as we go through but have a lovely day today. I hope that special someone has planned a great evening for Valentine’s Day. If they haven’t then you had better sort something pronto. Go on...stop reading this and get a table booked or something.


Some quotes for St Valentine’s Day

You can't put a price tag on love, but you can on all its accessories.
Melanie Clark

I wanted to make it really special on Valentine's Day, so I tied my boyfriend up. And for three solid hours I watched whatever I wanted on TV.
Tracy Smith

My boyfriend and I broke up. He wanted to get married and I didn't want him to.
Rita Rudner

Today is Valentine's Day. Or, as men like to call it, Extortion day.
Jay Leno