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

Risk aversion once again eased last night allowing those assets the market is not too confident on to appreciate through the session.

The Chinese export data that we reported was confirmed overnight and was the key driver of risky flows. However, as I mentioned in yesterday’s market update video, the reporting standards of Chinese economic releases have long been held with a certain amount of suspicion. They are however the tonic that risky markets needed in the short term and they have gratefully accepted.

The Bank of England and ECB both held interest rates at 0.5% and 1% respectively yesterday. Both were as expected and little impact on the trading day. Trichet’s press conference was also a fairly damp squib. Those of you who joined my webinar yesterday will know of certain things that we believe will set a sterling slide in motion in the near term. We will be doing a special on the budget nearer the time.

Sterling is however appreciating in the short term but has to hurdle a significant stumbling block in the form of the US retail sales report later today. The global economy has been buoyed by that Chinese data however should the US consumer, responsible for around 70% of US GDP, has not been spending as they should then those risky assets will fall once again. We do think this will happen in light of the poor jobs report from last Friday.

From a UK centric point we have UK manufacturing and industrial production announcements at 09.30 which should be strong.