So the Spanish won the World Cup with many suggesting that they take the trophy, sell it to Cash4Gold and try and kick start their economy. The economic impact of a World Cup victory is quite marked: expect to see consumer confidence and spending rise in that part of the world over the coming months and lots of babies called Andres born in 9 months time. Still, only 6 weeks until the Premiership starts.

Friday once again was a battle between equity bulls and bears with the currency markets flowing accordingly. Equities broke higher in the NY session allowing risky currencies some breathing space although the pound was weighed down after some poor data that morning.

Both PPI and UK trade balance missed estimates on Friday morning which allowed the GBP/EUR to entrench itself below the 1.20 level whilst GBPUSD ran out of steam at 1.52 and retraced closer to 1.50. It has since broken that 1.50 level and looks set for a test of 1.4750 level before long. GBPEUR has also broken lower and is below the 1.19 level for the first time in 6 weeks.

Risk will definitely be in the spot light this week as we kick off US Q2 earnings season with the traditional curtain raiser, Alcoa. Companies have left themselves a lot of wiggle room since the 1^st quarter and therefore we doubt a lot will disappoint; this would lead to dollar losses as traders reinvest into risky assets.

Sterling data releases were poor last week with the only ray of light the NIESR GDP estimate which put the economy at 0.7% vs. a 0.6% expectation. We do get the delayed final reading of GDP from the 1^st quarter and we are with the consensus that we will see it print at 0.3%. Other than that it is very quiet day.

As for trade today we would expect the break lower for the pound to continue. The S&P 500, the global equity bellwether, had its largest weekly rise in 12 months and with the lack of real bullish data traders may take risk off the table in an attempt to safeguard portfolios.