httpvh://www.youtube.com/watch?v=qtUSn0GHc4w

‘By the pricking of my thumbs, something wicked this way comes’ – William Shakespeare

Asset classes are flying into the teeth of a 2 week period of corporate earnings which will see the normally soporific summer months of the FX market become increasingly volatile.

Other markets that flourish in risk happy atmospheres have given up a large proportion of the gains they made in the period of March til June. The FTSE 100 for example closed at its lowest level since April over the uncertainty that markets feel at the moment. Sterling fell yesterday breaching the 1.60 level against USD and was taken for 3% by the rampant JPY.

The first report was from Alcoa, an American based aluminium producer. They posted a 26c per share loss which beat analyst’s estimations of a 38c decline. This has seen commodity currencies lose a little bit of ground, AUD in particular, but everything is still in a bit of a holding pattern. Holding for what?

The Bank of England’s MPC announcement is due today at 12.00 and while there is 0% probability that they will move exchange rates the view is split 50/50 on whether they will increase the ‘Quantatitive Easing’ facility from £150bn to £200bln or even £250bln. As we said yesterday and previous, an further expansion of the money supply will lead to the increased likelihood of a sovereign debt rating downgrade in the future. My money’s on a hold but needless to say it will be a volatile market in the aftermath.

Lost behind this hubbub of data, debt and depression is the G8 meeting which has proved to be a complete non-event.

World First’s Twitter page is up and running and we will be live ‘tweeting’ the impact of all these data releases and how they affect the markets. Click below for up-to-date news on all things currency. The address is http://twitter.com/World_First