httpvh://www.youtube.com/watch?v=Ps4vzZ-c3vw

Today we have published our ‘World First Economic Calendar’ (attached to this email). This calendar seamlessly fits into your existing Outlook calendar and details the important releases for upcoming week.) 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)

We’ve seen some strange days in the markets in the past 2 years; yesterday was particularly surreal as we started the session looking over the details of a European financial nuclear bomb and ended with PM Gordon Brown resigning in a bid to bring together a coalition between the Labour party and the Lib Dems and Nick Clegg being a right tease.

Equity markets and risky assets had a great morning as everyone got drunk on the feeling that the EU was saved. Stock indices were higher by 6% on average with bank shares doing particularly well. The euro strengthened to a high of 1.3075 and GBPEUR fell to 1.1465.

However as we said yesterday this was only likely to be a relief rally and by lunchtime this euro strength started to dissipate. We are with the consensus in our belief that that EURUSD will trade towards the 1.20 mark in the next 3 months and that the euro as a currency will have a pretty torrid 2^nd half of 2010.

Pound was strong for the most part of yesterday as a deal between the Lib Dems and Cameron’s Conservatives looked increasingly likely. It would naturally be the best solution to the current problem; the market does not want a Labour and Lib Dem partnership as they do not have the necessary clout to pass the financial cuts that are needed to solve our deficit problems.

The meeting between Clegg and his MPs to discuss the Conservative proposals took far too long for the markets liking and they began to mark down UK assets in the afternoon session before Gordon Brown punctuated the day with a big full stop.

In a bid to bring the Lib Dems over to the Labour party Brown fell on his sword yesterday and invited Labour to begin the process of selecting a new leader. The increased uncertainty around who the government will be rocked the pound down to the day’s lows against USD (1.4848) and lower against the euro (1.1566).

Economics wise we have had data from the UK housing (better than expected price increases) and retail sectors (retail sales fell in the month of April) and we turn our eye to Industrial and Manufacturing Production at 09.30.