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Another woeful set of UK unemployment figures crept out, putting the figures up to 27,000 in the three months to January which leaves it at the highest level for 17 years. The unemployment rate is now 8% of the workforce up from last quarter’s 7.9% but this is expected to remain stable. A survey conducted by OECD has concluded that the UK recovery will be slow between 20011-2012, thanks to austerity measures and weak export performance.

EU consumer price index came out lower than expected yesterday at 1%, but the most important event in the Eurozone was Portugal’s disappointing bond sale. The country sold 1billion euros of government debt but they had to pay a higher interest rate thanks to Moody’s downgrade of Portugal’s credit rating. The countries finance minister said that Portugal could finance its debts at current yields for a while, but he did mention it would be ‘unsustainable over the long term’. At least demand was still firm at 2.2 times the offered amount.

The dollar had a bit of a rollercoaster day yesterday, as we saw it break over 1.61 in the early part of the afternoon then fall back to around the 1.602 mark. The rate rise followed the monthly PPI report which showed a jump to 1.6% in February compared to the 0.8% seen in January, this is mainly down to an increase in food prices as the core PPI dropped from 0.5% to 0.2%. In other US news the Current Account deficit narrowed to -113.35B but this was weaker than what was expected at -109.00B.

US and European stocks fell after Guenther Oettinger, the EU energy commissioner, commented ‘There is talk of an apocalypse and I think the word is particularly well chosen. Practically everything is out of control. I cannot exclude the worst in the hours and days to come’. The EU energy office is set to release a statement after those remarks but it is clear the markets are extremely nervous as they struggle to predict the impact the crisis in Japan. Tokyo’s stock market rallied nearly 6% yesterday in the belief that recent selling had been overdone, while dollar/yen hit a record low of 76.25.

It is a nice quiet day for data with Eurozone construction output at 10am followed by some US releases like Industrial Production, Philly Fed Manufacturing and CPI.

Latest exchange rates at time of writing