Friday’s trade ended in rather damp fashion as the important Non-Farm payrolls figure from the US failed to deviate massively (-125k) from the expected consensus (-130k). A fall was expected as the census workers that gave the release an artificial bounce last month left the sample pool. The unemployment rate overall did drop to 9.5% from 9.7% unexpectedly however.

With traders unwilling to take on positions over the US long weekend this led to a fairly quiet day. Any other liquidity dried up as soon as the Netherlands kicked off against Brazil in their World Cup quarter final with traders finding Kaka more attractive than the CAC40. Markets are little changed since the Friday close although Asian shares have made positive movements overnight.

Looking forward to this week we have few bits of data but what there is is important and will cause some volatility. The Bank of England and ECB meetings are both due on Thursday and they each face different issues. The Bank of England saw the first vote for an interest rate increase in last month’s meeting since August 2008 although the consensus view is that we will not see a rate rise for a while (an article in yesterday’s Sunday Times predicting November of this year; we are looking for February). For the ECB, the equity moves lower in the US have taken the spotlight away from Europe in the past 3 trade sessions but Trichet is likely to be questioned heavily over the ECB’s debt purchases going forward.

Data from today includes Services PMIs from the EU and the UK. Both are expected to continue to expand although the consensus view for the UK shows growth at a lower rate than previous. This seems to be supported by a survey of finance directors in today’s Times that found that only 35% of those polled were optimistic over their company’s prospects over the next 3 months. 38% believe the UK will slip back into recession sometime in the near future

Latest Exchange Rates At Time Of Writing

Indicative Rates Sell Buy GBPEUR 1.2089 1.2117 GBPUSD 1.5164 1.5189 EURUSD 1.2531 1.2551 GBPJPY 133.21 133.53 GBPAUD 1.7983 1.8006 GBPNZD 2.1948 2.1978 GBPCAD 1.6089 1.6119 NZDUSD 0.6908 0.6924 GBPZAR 11.70 11.76 USDZAR 7.7067 7.7527 GBPPLN 4.9705 5.0000 EURJPY 110.08 110.34 Rates are dependent on amount transacted. Please call 0207 801 9080 for a live rate quote.