httpvh://www.youtube.com/watch?v=mrlFoUqv0Ho

• Greek debt hits 7% on 10 year term
• ASX falls by over 2% on bank fears
• FOMC minutes uneventful

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

Sterling shrunk a little yesterday as Gordon Brown announced the election is to be on May 6th. It was also a nice excuse for investors and speculators to fade the slight rally in sterling we saw towards the end of last week.

But while we lost ground against the dollar and most other currencies we were able to kick higher against the euro as the ‘ouzo crisis’ as one analyst calls it rattles on.

Further fears over problems in Greece including a renegotiation of the terms surrounding an IMF loan weakened the single currency pretty dramatically. The news that we covered yesterday of the Germans looking for higher interest charges on funds lent has also done the euro no favours.

This saw the yield on Greek 10 year debt rise to 7.19% while the ASX slumped by over 2% as banks reported that wealthy clients were emptying accounts to move funds offshore and thus avoid harsh new tax laws (like paying it at all – Ed). That yield figure is a real problem and until it falls to below 6% at least Greece and the euro will remain under pressure until it is sorted.

All of this put together moved the euro into the 1.14s against the pound and back into the 1.33s against the US dollar. The technical analysts here at World First are fairly happy with their assertions that the euro will continue to weaken against both sterling and the dollar in the coming days and weeks.

In other news, the Aussie dollar continued higher yesterday after the interest rate increase early in the session.

UK data was mixed yesterday with Construction PMI moving into the 50s, expansionary territory, for the first time in 2 years. This was counterbalanced however by news overnight that the important BRC shop prices figure had slipped to 1.2% against a consensus view of 1.7%. The FOMC minutes were uneventful as, while an exit strategy from ultra-low rates was discussed, no actions were taken.

Today’s data comes in the form of services PMIs from both the UK and Europe (08.58 and 09.28 respectively before EU GDP and PPI (both 10.00).

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