As for sterling’s prospects in the immediate aftermath we are hopeful of a sterling rise and we would expect it to break to its range highs of 1.67 against the USD on positive feedback.

-       World First Morning Update 10/09/09

With the Bank of England holding rates at 0.5% and not extending their controversial quantitative easing measures GBP has leapt higher with risk averse assets being sold off yesterday and overnight. Yesterday’s morning update expectations on sterling in the aftermath has turned out to be pretty spot on we are happy to say.

There was no accompanying statement to the release and we will have to wait for the minutes in 2 weeks to get the full picture. A split vote on QE will have the same results as it did last month: sterling weakness.

European equity markets are looking a little tired at the moment. The FTSE was unable to hold the 5,000 mark it fought for the day previous and the CAC and IBEX both had fairly uninspiring days. Overnight news from China has punched risky assets higher however.

Industrial production in China gained by 12.3% on a year on year measure, credit was higher whilst retail sales were also strong. The main Chinese stock market is 2.1% higher at the time of writing as a result with the US dollar continuing to lose ground against a basket of currencies.

Data today includes PPI from the UK at 09.30 and Michigan Consumer Confidence at 15.00. Barring a major disconnect we expect risk to be bought and the pound to head higher today.

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