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

·         BOE downgrades growth, inflation forecasts

·         EU Fin Mins unable to thrash out deal

·         Bernanke believes exit strategy will be negative for stocks

·         Further meeting on Greece to be held today

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

As we had predicted, the pound moved lower in trade after the Bank of England’s Inflation Report yesterday. A growth forecast downgrade, a middle-term dip in inflation and a reluctance to rule out further QE asset purchases all gave the release a much more dovish than most had expected.

This lead the market to begin to price out possible interest rate rises in the UK in the near term. We will wait until we see the GDP revision and CPI figures later this month before any shift in expectations. The pricing out did weaken pound however to a low of 1.1353 against the euro and 1.5575 against the dollar.

The euro is the talk of the markets, and the world, however as Finance Ministers meet in Brussels to thrash out a plan to deal with Greece. France and Germany were engaged in a furious bout of telephone diplomacy to get other member states on side last night after a video conference failed in finding a consensus. Germany will however only sign up if a significant austerity package is signed; the subject of protests in Greece yesterday. The summit is due to start at 10am GMT and live updates will be available on our twitter feed www.twitter.com/world_first

Ben Bernanke’s testimony to Congress was due to be cancelled due to ‘Snowmageddon’ but the Chairman of the Fed managed to get in front of a mic. Following comments that the Fed’s exit strategy from its stimulus measures would be negative for stocks, equity markets began to slither lower and the dollar strengthened on haven demand.

Economic data is very US centric with data on retail sales and jobs. Given the narrowing of the US trade balance yesterday we would expect the advance retail sales figure to be low and therefore we may see a weakening of the dollar. The one thing to bear in mind is that the dollar has been increasingly trading on risk flows as opposed to its data of late and that any underlying current of risk or aversion thereof may trump any data release.

All eyes are on Europe however today