Blog

Yesterday the markets digested the minutes of the February interest rate meetings for both the UK and the US. Firstly looking at the UK the vote was a unanimous 9-0 to keep interest rates on hold and also to hold QE at £200 billion. The feedback from the MPC was ambiguous in the sense that the decision was unanimous and yet the comments were that it was a “finely balanced” decision to keep QE on hold. The unanimous decision gave sterling a boost which was then tempered by weaker than expected employment numbers. Going forward this does not change the sentiment for sterling which will struggle to appreciate until the outlook for the UK warrants a more hawkish approach from the MPC. Read the rest of this entry »

Jobless claims were up 23,500 against the expectation of a fall of 10,000 so not good feedback for the employment sector. This data for January was disappointing but not wholly unexpected and simply reinforces the fact that the employment sector remains very sluggish. Although we may have officially exited the recession on paper the reality is that we still have a long a painful road ahead.

The official unemployment rate remains at 7.8%. In addition to the employment data we also had the minutes from the February interest rate meeting for the UK. The BoE minutes came in 9-0 as expected to keep interest rates and QE on hold. Although all members voted to leave the size of the asset purchase programme unchanged- it was noted that some members felt the arguments for a further increase were “finely balanced”. This underlies the uncertainty within the MPC on the future impact of the £200 billion already introduced and therefore the MPC will not close the door on further QE if required.
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Graham Hunt has been living and working in Spain for two decades now. He decided to come to Spain at an early age after listening to Radio Exterior on Short Wave as it faded in and out and wondered what on Earth was gong on as he only understood Goooooal!!!

Graham pledged a few weeks ago to make a video to illustrate the Spain that he sees as an ex-pat, the Spain that doesn’t get reported these days. Have a look through Graham’s eyes at what Spain is for him and if you agree post a comment:

Video courtesy of Graham Hunt

UK CPI came in at 3.1% against the expectation of 3.2% so slightly lower than expected. However the year on year rate is +3.5% and will require a letter of explanation from Mervyn King to Alistair Darling to explain why. King has regularly banged the drum that inflation will come down as we move through 2010 and today’s data to a small extent justifies his forecasts. However the data did not move the FX markets which have been quiet today considering the amount of market feedback. What the data does assist with is the BoE continuing with their policy of low interest rates and leaving the door open for further QE if deemed necessary.
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The Currencies Direct team in Spain was celebrating at the Alanda Club, Marbella on Wednesday evening after Business Development Manager Keith Spitalnick picked up two awards at  the 4Business International Awards Ceremony including  the coveted “Networker of the Year” award 2009/10.

Presenting the award to  Keith was Maurice Boland of Talk Radio Europe who is well known along the Costa del Sol for his morning show on TRE as well as his tireless involvement in numerous charities including Cudeca, and as the creator and founder of the WOW factor talent contest on the Costa del Sol and Gibraltar. The proceeds of the raffle drawn during the awards were also donated to Mr. Boland’s Haiti appeal. Entertainment for the evening was provided by the talented singer and runner up in the 2009 WOW factor contest, Rebecca Tate and 4Business International member and entertainer, Trevor Hamlett.

Keith with his 4business award

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To discuss further details on EU plans for Greece and the next steps. The euro has taken a beating over the past couple of weeks over the wrangling with Greece and ministers need to tread carefully or risk further fear in the markets and selling of the euro. Aside from this we have very little to focus on today. Risk appetite remains weak as Greece and other European countries continue to undermine confidence; in addition monetary tightening in China and comments of revaluing the Yuan are adding to the reduced confidence. In relation to the Yuan Jim O’Neill from Goldman Sachs suggests that China may revalue the Yuan by up to 5%- this may not happen especially during Chinese New Year but it is still a possibility and hence undermining risk.
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