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Bulls have managed to wrestle the reins of the global markets away from the bears in the past couple of days but we are not completely off to the races yet. The lingering fear over Greek debt and rumours over deeper problems in Spain are just keeping everyone humble as opposed to indulgent at the moment.

The S&P rose by 2.4% while the FTSE gained by 0.3% with BP dragging the latter a little. It initially looked like the positive run of the past few days was going to end with the publication of a truly horrific ZEW survey from Germany, missing expectations by a country mile, and coming alongside fears from Fitch that the Germans may see a ‘double dip’ recession in the final quarter of the year.

Traders shrugged this off, as well as poor inflation data from the UK. CPI in the UK has been notably stickier compared to other industrialised nations however it fell to 3.4% against expectations of 3.5%. Sterling initially jagged lower post announcement but was dragged back to the party by the improving risk atmosphere. Risks to the pound still exist and we have a fairly heavy UK data session today.

Structurally we have the latest set of numbers from the UK jobs market at 09.30. The claimant count is estimated to fall by around 20k; anything less than this will heighten fears that the fiscal measures due in next week’s budget will push unemployment close to the 3m mark. The unemployment rate is also published at the same time and we expect it to stay at 8.0%.

The biggest harbinger for the pound however comes in the form of Mervyn King and his speech to the crowd at the Mansion House tonight. While George Osborne is more likely to take the headlines we have to bear in mind that every single time Mervyn King has commented on the state of the economy publically the pound has lost ground. George Osborne is getting closer to his big day and is starting to be put under pressure by the unions. Unison, the public services union, will be balloting members for strike action should the government cut public services, pay and pensions. This is pretty much a foregone conclusion however.

Other pieces on the data calendar to take note of include EU CPI (10.00), US Housing Starts (13.30) and US Industrial Production (14.15).