Sterling strong after NIESR forecast upgrade

Today's Highlights

Sterling strong after NIESR forecast upgrade

French Industrial production up

Greece hints at Russian involvement if EU won't play ball

FX Market Overview

It is only 4 days to St Valentine's Day. I just thought I would mention it to save arguments and avoid the need for petrol station flower purchases in 4 days' time.

If you can get past the HSBC tax dodge headlines and past the argument about which government let this happen on their 'watch', you will see the Eurozone/Greece story is still alive and kicking. Kicking with some vehemence in fact.

French industrial production rose in December at 1.5%; well above market expectations and well above the November figure. It is good news for the euro but you can largely ignore it because Greece is upping the ante in their wrangle with the EU. In a meeting planned for tomorrow, Greece will outline its plans for less austerity and a redesigned debt repayment program. As we await that meeting, the Greek defence minister has said that if Europe won't cooperate, Greece will go elsewhere for its finances. He alluded to a tie up with America, Russia or perhaps China. Politically, it would be hard to see America ignoring Eurozone concerns and funding Greece but the other two...well yeah....maybe. It is a tad ironic that Merkel and Obama are saying Russian aggression in Ukraine reinforces European unity. Tell Greece that.

So while that stews in Europe, the UK economy is on the up according to NIESR who have a name too long to write in full. They have upgraded their forecast for UK growth in 2015 to 2.9% from 2.5% previously. Sterling, which is already at its strongest levels in years, gained another soupçon on the news. If this morning's industrial and manufacturing figures are as positive as the forecasts would suggest, we may well see further GBP strength before the day is over.

Overnight news that Chinese inflation fell again was not good news for either the Australian or New Zealand Dollar. However, the Australian business confidence index ticked higher and so did the house price index (on a month by month basis), so that balanced things out somewhat.

The US Dollar is devoid of reasons to move today as US data is of the 2nd tier category. However, Federal Reserve speakers are calling for early interest rate hikes to avert future bubbles and that is keeping some of the strength in the USD.

And I loved the security tactics of Brazilian football club, Sport Club do Recife. They have had all manner of trouble with hooligans and fighting in the stands so rather than getting a bunch of burly blokes patrolling the stadium, they enlisted some of the fans own mums. They trained the ladies to be security guards and at their last home game there were no arrests and no acts of violence, What's more, their team also won.