httpvh://www.youtube.com/watch?v=ZNOapsO7rDU

·         Record number of bets laid on further euro weakness

·         EU Finance Ministers want further austerity measures

·         UK inflation due to rise above 3% target

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

Bets against the euro continued to increase last week even though politicians are hopeful for a bailout for the Greeks, new figures showed us yesterday.

63,000 contracts to short sell the euro are currently live in the market. This represents $9.9billion of bets against the single currency; a figure normally reserved for World First bar tabs or my expenditure on pink shirts.

The Eurogroup are also allowing the market to teach Greece and, through them, the euro, a lesson. Comments from yesterday’s meeting of finance ministers called for increased austerity (less government spending, higher taxes) as opposed to detailed plans of financial aid. It’s a shame this meeting was not held in Venice; finance ministers seem determined on getting their pound of flesh. Until we do get a concrete message the euro will continue to be unloved as it is poisoned by that most potent of elixirs: uncertainty.

Another potion that some markets are particularly partial to at the moment is inflation. UK CPI is due this morning at 09.30 and is expected to break through the 3% level for the first time in 14 months. January inflation is always a pain in the backside to try and call as we judge just how well January sales were taken up. This year of course we have the added distortion from the VAT rise to 17.5%. Consensus view is 3.1%; anything higher will see the pound shift upwards. The news that inflation may go over 3% is not new however and we expect to see Mervyn King write at least 2 letters of explanation to Alistair Darling in the coming months.

The euro could remain in the crosshairs today with German ZEW due at 10.00. This measure of economic sentiment has been falling of late and with the news that the German economy registered no growth in Q4 means that we expect a fairly negative reading today. Apart from our CPI and German ZEW we have tier 3 manufacturing data from the US at 13.30.