Details of the UK’s Asset Protection Scheme were published overnight. Summarising the reams of mumbo jumbo and jargon it boils down to a facility that will allow banks, for a fee, to ring-fence certain toxic assets off of their balance sheets on a 5 year plan. During those five years the bank will be compelled to increase its lending operations in an effort to loosen uncertainty’s grip on choked credit markets.)

RBS will be the first entrant into the scheme and will be seen as an example of what is to be expected. They are to increase lending by £25bn split £9bn for mortgages and £16bn for business lending.

President Obama’s budget went before Congress yesterday laden in some truly staggering figures. The deficit is set to explode to its biggest level since WW2, the total budget spend is close on $3.6trn dollars which makes an average spend per American of $11,833. It is becoming increasingly clear that Obama’s presidency will be defined by these days and how well the market swallows these ever increasingly bitter pills.

Data was particularly mixed yesterday emphasising the broad Diaspora of individual fortunes during these hard times. Nationwide house prices showed that the boom of the last 5 years in UK property has been almost entirely wiped out by the previous 18 months’ problems. The US housing market is not faring any better as New Home Sales slumped once again to new lows and completing the depressing three Initial Jobless Claims printed 42k higher than the expected 625k.

The only UK data for release today has already been and gone and bugger me it was good news for a change! The GFK consumer confidence figure rose by 2 points to -35 as many consumers surveyed believed that the economic situation will be better in 12 months time. Record low interest rates on mortgage payments will no doubt improved participants’ moods.

Further analysis is of course always available at our video blog http://uk.youtube.com/user/WorldFirstJC

Have a great weekend  

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.

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