Central bank Thursday turned out to be pretty boring to be honest as both the Bank of England and European Central Bank continued their respective ‘steady as she goes’ policies. Those of you who tuned into the webinar yesterday will know that we don’t think that rates will rise in the UK until February of next year while in both Europe and the US we expect the relevant bodies to wait until at least Q2 2011 to pursue a tighter monetary policy.

The euro was the best performing currency of the G4 yesterday as risky assets, including equity markets, pushed higher. German industrial production really gave the single currency a shot in the arm as it was announced that production rose 2.6% in May, compounding a 1.2% gain in April. Most companies surveyed said they owed the high figures to demand from China but with figures in that part of the world starting to look shaky, the prospects for continued growth of such a nature are few. Imports were also higher.

The first estimate of UK Q2 GDP was released by the NIESR yesterday afternoon. They estimate that the economy grew by 0.7% in the 3 months to June against a figure of 0.6% in the three months to May. This of course is not the definitive article but allows some insight into the prospects for the UK economy. This was also released one day after the IMF downgraded its expectations for UK GDP in 2010 and 2011 to below what the government and the ‘independent’ OBR think.

Risky assets were also helped upwards on the belief that the Q2 earnings season in the US would produce a lot better results than those seen in Q1. Most of this belief is centered around the upbeat earnings report from State Street, an American custody bank. The news that jobless claims in the US fell by 25,000 people in the past week also helped the bulls.

EURUSD has once again continued to push higher and is now trading in the 1.27s, the highest it has traded since early May while GBPEUR has pushed into the low 1.19s.

Data for today includes UK’s PPI and Trade Balance measures, both at 09.30, and US Wholesale inventories at 15.00.

Have a great weekend.