It has been yet another volatile weekend for financial markets as re-votes, rescues and recapitalisation dominated news flow.

The House of Representatives managed to get their act together and put aside partisan politics for enough time to pass the TARP on Friday by a comfortable margin; the bill was immediately signed by President Bush. This did little for global equity bourses however as the Dow Jones fell by 1.5% and the Nikkei is down 5% this morning. Part of this could be down to the poor nonfarm payrolls announcement which told us that 159k people had lost their jobs in the past month; mainly from manufacturing and retail jobs. Rumours of an intra-meeting Fed rate cut to stimulate the economy have increased over the weekend.

Last week we told you of a bail out of the German property giant Hypo by a consortium of banks; this fell through late Saturday and as such has been left to the German government to shore up the beleaguered institution. Angela Merkel has also become the latest European leader to allow their country to safeguard depositors’ funds; so far Ireland, Greece and Denmark have also made similar pledges. As a result GBP/EUR has weakened in overnight trade to the highest level since mid March.

Britain however would not be left without publishing some big news or ‘big steps’ as Chancellor Darling called them. Considerations for the next step of the Labour government’s plan to deal with the credit crisis could include an effective part nationalisation of the entire banking sector, with taxpayers funds being used to recapitalise and prop up ailing balance sheets.  We can expect an announcement from the Chancellor on Thursday when Parliament returns from its summer holidays.

Please feel free to contact me (jeremy.cook@worldfirst.com) if you have any questions or thoughts regarding these updates or if you are interested in a particular event in the calendar. If you would like to discuss your foreign exchange requirements, please contact our:Corporate Foreign Exchange Team on 020 7801 9050 or our Private Client Currency Exchange Team on 020 7801 9080. Disclaimer: The above comments are only our views and should not be construed as advice. You should act using your own information and judgement. Although information has been obtained from and is based upon multiple sources the author believes to be reliable, we do not guarantee its accuracy and it may be incomplete or condensed. All opinions and estimates constitute the author’s own judgement as of the date of the briefing and are subject to change without notice.Any rates given are “interbank” i.e. for amounts of £5million and thus are not indicative of rates offered by World First for smaller amounts. E&OE. Definitions of jargon/market terms can be found in our Glossary of Foreign Exchange Terms.