httpvh://www.youtube.com/watch?v=S0WE53Ik5uY

• Yield is a problem at 5.9% though
• ‘Ask The Chancellors’ debate passes without incident
• S&P affirm UK’s AAA rating
• AUD stronger on RBA Governor’s comments.

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

The euro held onto its recent gains yesterday as fears that a massive fiscal harbinger lay on the horizon lessened. The news that Greece had successfully negotiated another round of capital raising in the money markets also helped the single currency although the yield was still elevated. Increased consumer and industrial confidence was also a factor in the newly hard euro.

Greece raised EUR5bn at a yield of 5.9% with a 1.4x cover; all is fine apart from that interest rate. 5.9% is about 325bps above where a similarly termed German bond would be priced and nearly 2% above a Portuguese or UK bond which are the next riskiest according to the market. Regardless of bailout measures Greece cannot continue to funds itself at rates close to 6%. This is the equivalent of a credit card with an APR of over 20%; far too expensive.

The ‘Ask The Chancellors’ debate was an exercise in futility as the market took little notice with very little movement provoked by Darling, Osborne and Cable. The papers and the bloggers seem to be putting the winner’s medal around Vince Cable’s neck as it was only him who talked in specifics. He definitely attracted the populist vote and according to a poll done by Channel 4 he won with a vote of 36% against both Darling and Osborne’s 32%. The post match analysis boiled down to a good night for Darling as he was seen as combative and more electable than his boss while Osborne was congratulated for getting through it. The expectations were set so low for Osborne he would have had to set fire to his podium to be considered the loser. It does set us up for the leadership debates nicely however and they should have more impact on the markets.

In other UK news, Standard & Poors yesterday affirmed their AAA rating and the negative outlook they have on the UK economy.

Overnight the Australian dollar has received a boost as a television appearance by RBA Governor Stevens caused the market to price in more than a 70% probability of a rate hike next week. His comments about the housing market caused thoughts that mortgage rates would begin to increase soon, obviously following a jump in central cash rates.

Data for the day includes the last estimate of Q4 GDP for the UK (09.30). We expect no change from the previous figure 0.3%. This afternoon we have US Case-Shiller House Prices at 14.00 and US Consumer Confidence at 15.00.

· Yield is a problem at 5.9% though

· ‘Ask The Chancellors’ debate passes without incident

· S&P affirm UK’s AAA rating

· AUD stronger on RBA Governor’s comments.

·

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

The euro held onto its recent gains yesterday as fears that a massive fiscal harbinger lay on the horizon lessened. The news that Greece had successfully negotiated another round of capital raising in the money markets also helped the single currency although the yield was still elevated. Increased consumer and industrial confidence was also a factor in the newly hard euro.

Greece raised EUR5bn at a yield of 5.9% with a 1.4x cover; all is fine apart from that interest rate. 5.9% is about 325bps above where a similarly termed German bond would be priced and nearly 2% above a Portuguese or UK bond which are the next riskiest according to the market. Regardless of bailout measures Greece cannot continue to funds itself at rates close to 6%. This is the equivalent of a credit card with an APR of over 20%; far too expensive.

The ‘Ask The Chancellors’ debate was an exercise in futility as the market took little notice with very little movement provoked by Darling, Osborne and Cable. The papers and the bloggers seem to be putting the winner’s medal around Vince Cable’s neck as it was only him who talked in specifics. He definitely attracted the populist vote and according to a poll done by Channel 4 he won with a vote of 36% against both Darling and Osborne’s 32%. The post match analysis boiled down to a good night for Darling as he was seen as combative and more electable than his boss while Osborne was congratulated for getting through it. The expectations were set so low for Osborne he would have had to set fire to his podium to be considered the loser. It does set us up for the leadership debates nicely however and they should have more impact on the markets.

In other UK news, Standard & Poors yesterday affirmed their AAA rating and the negative outlook they have on the UK economy.

Overnight the Australian dollar has received a boost as a television appearance by RBA Governor Stevens caused the market to price in more than a 70% probability of a rate hike next week. His comments about the housing market caused thoughts that mortgage rates would begin to increase soon, obviously following a jump in central cash rates.

Data for the day includes the last estimate of Q4 GDP for the UK (09.30). We expect no change from the previous figure 0.3%. This afternoon we have US Case-Shiller House Prices at 14.00 and US Consumer Confidence at 15.00.