Euro steady after IMF and French comments

Today's Highlights

Sterling up ahead of public sector borrowing and BOE minutes

Euro steady after IMF and French comments

FX Market Overview

We all know what the worst pain in the world is don't we. I know mothers always say it is childbirth but we all know there is something worse. It is still related to children in a way though. I think we can all agree that stepping barefoot onto a piece of Lego is the ultimate pain. Yep. You can feel it now can't you. So beware the beaches of Devon and Cornwall because pieces of Lego are washing up on shore as they escape from a ship which was wrecked in 1997 carrying oodles of little bricks and dragons and the like. As if the rocks and pebbles weren't painful enough.

Slightly less painful was Monday's foreign exchange market volatility. Bland, limp, directionless; these and other ruder adjectives have been used to describe Monday's volatility and all are accurate. We'll have more to discuss today with the release of UK public sector borrowing figures and the CBI industrial trends survey and it'll get even more interesting tomorrow with the release of UK mortgage lending data, the British Retail Consortium's survey and the minutes from the last Bank of England meeting. A decline in mortgage activity is pretty well guaranteed as lenders tighten policy but an upturn in retail activity is expected and all anyone really wants to know about the BOE is when the first interest rate rise is due. My guess is Q2 of 2015 as we don't have any inflation fears and growth is still anaemic but perhaps the Monetary Policy Committee has other ideas. Sterling is a tad stronger ahead of this news.

From Europe we hear that the International Monetary Fund is upping its forecast for German growth at the same time as the head of France’s Medef business federation Pierre Gattaz called for an end to the 75% tax rate and relaxation of the rigid 35-hour working week laws. He said that these were a part of a ‘catastrophic’ economy. Things could get worse if the French pull the plug on warship and armament contracts with Russia although few are convinced that is going to happen.

The big data of the day will be US consumer price inflation. A forecast upturn of 1 or 2 basis points will keep the US Dollar in its present ranges but the likelihood of further US Dollar strength seems a little remote at the moment.

The other big news which may have repercussions for the financial markets is whether the UK and EU can agree on sanctions against Russia for their perceived involvement in the murder of the 298 innocent people on flight MH17. Prime Minister Cameron has already warned the markets that they will feel the pinch but quite how much purchase that pinch will have is the unknown factor.

And in the 'thank goodness so many criminals are dumb' category, pregnant Danielle Saxton of West Frankfort, Illinois has been arrested after posting selfies on Facebook showing her in a maternity dress she is alleged to have stolen earlier that day. The store owner posted CCTV pictures of her after she left the store with what she thought was a stash of stolen goods and , in a town of barely 10,000 people, it took no time at all until someone recognised Danielle and gave the store owner her details. And lo and behold, there she was on Facebook with one of her contraband dresses. Duh!