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Yesterday’s Retail Sales in the UK came out better than expected at 0.3%, however this was still worse than last year and down from the 0.4% in March. Apparently food stores are to blame for the flat sales, with ASDA recording their first drop in sales for in four years. The outlook is not enthusiastic for the future as high taxes and petrol are causing people to shut their purses. Other news from the UK is that the slump from the top of the market for commercial properties has caused property debt to rocket and £50bn worth of bank loans hit trouble.

The world is still talking about Germany’s ban on naked short selling, as European leaders struggle to unite the nations to tackle to debt crisis. Angela Merkel is vocal on the fact even after Germany’s ban, saying, ‘“The euro is in danger. If the euro fails, then Europe fails. If we succeed, Europe will be stronger.” She also called yesterday for a global levy on banks as well as a new European rating agency and an organised exit from stimulus measure, which seems confident bearing in mind the markets are still flustered. Indeed the worries over the tightening of regulations around banks and financial markets have sent share prices off track, mainly due to a lack of investor confidence. German GDP came out this morning showing that it has grown on an annual basis of 1.6% which was as expected and better than last year.

In Greece there have been protests over wage cuts which has done nothing to dispel the growing fears in the euro zone, with worries that other countries will follow Germany’s ban. Euro is up on the back of a possible intervention from the US federal reserve , ECB and BOE but this could be another rumour as yesterday it was denied that Greece was leaving the euro for good. Euro’s bounce has provided a bit of a break for shares but unfortunately extreme volatility is not enough to support riskier assets.

US stocks are also down due to the fears from Europe, a top federal reserve official stated that the crisis poses a ‘potentially serious’; risk to the US recovery because of the threat to global credit markets and international commerce. This, and news that employment and new orders have slipped, has caused the USD to drop. This morning the US senate approved a historic Wall street reform bill which Obama says will hold financial firms accountable but will not damage the free market, and this is also causing a drop in USD.

There is a large chunk of data out for the UK this morning which should will most likely have an effect on sterling. This is followed by more important releases from the euro zone with Germanys IFO Business Climate which should shed some light on the country’s current sentiment and business expectations, while the PMI manufacturing is also released for the whole euro zone.