1899 was a year the lawn mower was invented, Ernest Hemingway was born and W G Grace retired from test cricket. It was a world in which man hadn’t learnt to fly, no-one had set foot atop Everest and the last time UK gilt yields were as low as they fell to yesterday. Yields on the global benchmark US treasury bonds also retreated to levels not seen to 1950 and gold reached for new highs as investors headed into the arms of safety

Another bout of risk aversion swept throughout global markets as data disappointed and fears about the funding of European banks rose its ugly head again

The ECB admitted yesterday it had provided liquidity to the tune of $500m to a European bank, sparking fears that should a crisis within the Eurozone eventuate European banks capital adequacy would not be sufficient to cover any write-downs. Despite last week’s ban on short selling financial stocks the selloff continued, with the usual suspect Societe Generale falling 12%. UK banks also suffered heavily, seeing the FTSE close down 4.5%. The pound remained strong in the face of the turmoil, supported in large part by inflow into UK Gilds

Despite further bad data from the US, the Philly Fed figures showing manufacturing in the region had fallen to levels not seen in two years, while inflation figures and initial jobless claims also  disappointed. The USD continued to benefit from safe haven flow, while the euro was further sold off as most of the bad news is euro-centric

German PPI is the only piece of data out today, we will be looking towards risk indicators to determine direction today.

Latest exchange rates at time of writing