Cor blimey, it’s all happening now! The past 24 hours have seen a Fed decision, a US economic stimulus package jump a hurdle in Congress, the IMF bash the UK and yet another central bank slash rates to record lows.

There was never any possibility that the Fed would play with interest rates yesterday but we, and the market, believed they would take the opportunity to clarify their position on a couple of issues. Rates will stay low for a while in the US and while the hand is still near the quantative easing lever, it may not be pulled until summertime. Updated PCE and GDP figures will be released with the minutes on Feb 18th.

They say that the first 100 days of a presidency are the most important; Barack Obama’s stewardship of the good ship Free World could well be defined by the performance of a bill passed the House of Representatives. $819bn dollars have been portioned out so as to help Americans deal with the financial downturn however it has not been all sweetness and light. Not a single Republican voted for the plan although the overwhelming Democrat majority in the House guaranteed safe passage. The majority in the Senate is a lot slimmer however and further farces over funding programs could prove catastrophic. The bill has now had a $350m provision for. STD medication taken out alongside $20m to regrass a shopping centre.

The International Monetary Fund released a statement yesterday with the belief that the UK will be the worst affected major economy in 2009. I have rechristened the IMF as the Intensely Morbid Foundation as a result but their figures are rather startling. They have forecast that the UK economy will shrink by 2.8% in 2009, much worse than the 1.6% predicted for the US, the 2.5% for Germany or Japan’s 2.6% reading.

Sterling may well be propped up by an increase in risk appetite due to the US stimulus package in the teeth of these comments.

Equity markets surged yesterday with UK financial shares doing particularly well. Royal Bank of Scotland rose by 44%, HSBC by 9.7% and Barclays leapt 19% higher. The biggest mover was Lloyd’s Banking Group which surged 50% after Citigroup raised the bank’s rating to buy.

The RBNZ slashed rates by 1.5% overnight taking their reading to 3.5%; a record low. The accompanying statement was very dovish with further rate cuts hinted at albeit at a slower pace.

Data today includes Initial jobless claims from the US alongside Eurozone Consumer and Industrial Confidence.

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