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Traders continued to worry yesterday on the geo-political risks that the killing of Osama Bin Laden would bring to the West and pushed equities and commodities lower and haven currencies higher. Equities were down overnight in the US and Asian markets also slipped as well this morning.

Other risks to the recovery were evident in the UK manufacturing PMI figures released yesterday that showed a dip in growth to 54.6 vs. the previous figure of 57.1. The figure was also broken down to show a big drop off in new orders with most of declines seen in the domestic atmosphere. You would have to expect a similar poor figure from the UK construction sector that reports at 09.30. I would be surprised if a large amount of that dip from the manufacturing sector was not from falling confidence in the construction sector.

For a currency so heavily dependent on good data yesterday’s manufacturing number smacked sterling right between the eyes and hammered GBPEUR to a low of 1.11. Ground was also lost against the dollar with falls back into the 1.64 region.

It was also announced late last night that the Portuguese have finally agreed bailout terms with the EU and International Monetary Fund. The figure looks to have been set for a £69bn loan to be repaid over the course of the next 3 years. The breakdown of the Portuguese government means that the winner of the election scheduled for June 5^th will have to enforce the accompanying austerity measures on the Portuguese people. This announcement has had little effect on the single currency so far as it remains strong against the dollar and pound.

Apart from the construction figrue from the UK we have service sector news from the whole of the Eurozone at 09.00 alongside a Portuguese debt auction at 10.30 and news from the US services sector at 15.00. Both the Eurozone and US numbers should be strong and the auction will be closely monitored for bond vigilantes hijacking the bailout sentiment.

Latest exchange rates at time of writing