Monday 7th July 2008
Following on from last weeks meeting of the ECB when Euro rates were raised by 25bp, the MPC are due to meet on Thursday. Expectations are for a hold in rates keeping the UK base rate at 5% for the third consecutive month …..not long to wait to find out!
The US Dollar continues to strengthen on from Friday. The holiday affected market chose to ignore US economic woes and drift the Dollar on a firmer bias in very thin trading.
Onto the Commodities, no real change in Oil prices although due to the record highs it now looks like this will filter through to fuel prices, so not good news for all us car owners. Gold is trading slightly lower since Friday’s opening falling from 940 back to 920 as the Dollars strength filtered through.
A miserable outlook for UK employment in Britain, with available permanent jobs having fallen for the first time in five years whilst the number of people looking for employment rose last month. The situation for those looking for temporary work is also worsening. Will this be the start of the first recession in almost 20 years in Britain?
Onto slightly better news, it looks as though some of the mortgage lenders have started to bring their down lending rates in line with a fall in the Sterling yield curve at it’s longer end. However, with the lenders tightening their already restrictive criteria for borrowers, this move lower in rates is unlikely to bolster the housing market to any degree.
Things to look out for today:
The G8 summit starts today to primarily discuss climate changes, however one cannot discount comments emerging more relevant to the current economic woes.
10:00 GMT German IP figures are out, expectations are due to come out slightly stronger
14:00 GMT US Conference board employment trends index are due out and still getting worse
15:00 GMT ECOFIN meeting
And if you thought things were bad in the UK, over in America one religious group has resorted to praying to reduce the price of oil, stating ‘God is the only one we can turn to at this point’
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