In a positive move for the war in Afghanistan David Cameron said today that the MoD are planning to start removing troops in 2011. They are examining cutting British land forces from eight to five brigades, which would hand the army control of the Royal Marines. The plan is to remove the 9,500-strong force out of the war zone within five years, in line with an international aspiration to give Afghans full control of their security by the end of 2014. Gross mortgage lending rose by 15% in June, which was a 7% increase compared to June last year, however the Council of Mortgage Lenders say that these figures are still indicative of low levels of activity.

Bulgaria swore yesterday to work harder at combating high-level corruption and organised crime after the European commission renewed their criticism. Although they commend prime minister Borissov for his ‘strong political will’, there are not enough convictions being made in court. When European regulators publish the results of their stress tests on Europe’s banks this week, they plan to detail three scenarios. According to Bloomberg, banks will publish Tier 1 capital ratios, an adverse scenario and another test including ‘sovereign shock’. Germany’s biggest banks are on track to pass a financial health test, despite claims that nationalised Hypo Real Estate is likely to fail.

The US senate broke a stalemate between both parties yesterday by paving the way to extend long-term employment benefits. This debate has caused 2.5 million jobless Americans to lose their weekly income cheques. Apparently there was no issue as to if they should pass the bill, but rather if the bill would add to the debt. This scuffle over jobless benefits is a pawn in the game of whether Congress should spend more to stimulate the economy or start making cuts to reduce the budget deficits. US housing starts also fell by 5% last month which was a bigger fall than wall street expected, although this was an improvement from May where starts were down by 14.9% due to the expiry of government stimulus in the area.  As I mentioned yesterday, in the Fed’s speech later today they hope to calm these troubled waters that have been caused by the spate of weak economic data. Goldman Sachs Group posted lower second-quarter earnings yesterday, after they were damaged by the SEC fraud charges. Revenue fell to $8.84 billion from $13.76 billion a year earlier.

Other than the BOE minutes this morning and the Fed’s Bernanke making his speech at 15:00 there is very little to report today on the data releases front. Both may influence the volatility of sterling and dollar, including determining a positive or negative trend.