httpvh://www.youtube.com/watch?v=vxezQyzREK0

·         Plan to help Greece talked about by Berlin, Trichet

·         EUR/USD moves back into 1.38s

·         UK Trade Balance is worse than expected on autos and aircraft

·         Inflation Report due from BOE, Trade Balance from US.

All this and more is available on our blog. Click here  http://www.worldfirst.com/blog

First off, apologies for any problems you may have had with the World First Economic Calendar. This is still a new product and there was always going to be some gremlins. The version attached is the new and correct one. This does however not work in Outlook 2003 or on a Mac however development is going into releasing calendars in those formats. Simply open the attachment (selecting replace if you downloaded last week’s)

What started out as a normal day turned into one of rumour and great expectations yesterday as rumours of a German crafted aid package for the Greeks fuelled the fires of risk.

The euro had started the morning in a frisky mood, creeping higher on a trade weighted index as traders took comfort in the news that Jean-Claude Trichet was to return from an Australian conference for an emergency meeting. The hopes were that his presence would be needed to help thrash out a recovery plan. EURUSD moved back into the mid 1.37s while GBPEUR slipped back towards 1.13.

94 seconds after the European equity markets closed we got a newsflash; EURO ZONE GOVERNMENTS HAVE DECIDED IN PRINCIPLE TO HELP GREECE-SENIOR GERMAN RULING COALITION SOURCE. This saw the equity markets that were still open surge higher and EUR/USD back into the 1.38s. The problem was however that Berlin then came out and denied this. And then went back on that. To say it was volatile would be an understatement.

The euro will continue to trade on this data but clarification will be needed on the exact make-up of the package (IMF or EU for a start).

The strong euro did push sterling lower over the day although it had started in a depressed mood. UK Trade Balance was expected to narrow in line with more exports and less imports however the figure slipped from -£6.8bn to -£7.28bn. This is mainly being attributed to the ‘cash for clunkers’ scheme and some aircraft purchases.

Our belief that sterling would lose ground in the time between the two BOE meetings this month has turned out to be correct. The Inflation Report is unlikely to be a happy playground and should we see a growth forecast downgrade sterling will continue to lose ground.

The other pieces of UK data today should be positive however. Manufacturing PMI has been strong for 2 months in a row and today’s manufacturing production figure should be a good ‘un too. Apart from our Inflation Report we have Tier 1 data in the US trade balance at 13.30