Eurozone inflation still falling

Today's Highlights

Thin data stream leaves markets range bound

Eurozone inflation still falling

ECB reiterates readiness to act

FX Market Overview

I heard Alex Salmond on Radio 4 this morning and I know I am treading on very rocky ground venturing into the independence debate but despite several questions on the subject, he doesn't appear to have a Plan B if the rest of the UK decided that Scotland could not use the Pound. He seemed to be pinning all of Scotland's monetary plans on the quote from an un-named government source in the Guardian. Should the Scots be worried?

The Bank of England did the obvious thing and left their base rate and QE budgets on hold. If anyone was surprised, then I am not doing my job well enough because Mark Carney has been very clear in the fact that UK interest rates are not going to rise soon and when they do, it will be a slow grind higher. Sterling gently ground lower against the Euro yesterday but kept the spring it has in its step against the US Dollar and recovered some lost ground against the Australian, New Zealand and Canadian Dollars. There is no UK data today so Sterling is likely to meander within the recent ranges.

Whilst this morning's German inflation data was a little lower; at a 3 year low in fact, the Euro really didn't react in a remarkable way. It did get a little bit of a boost from this morning's news that credit ratings agency, Fitch, has upgraded Portugal's rating outlook to 'positive' but comments reported from the head of the ECB. Mario Draghi will have undermined that. He commented that inflation expectations in the Euro Zone were in line with the ECB’s target. He also made it clear that they were ready to implement unconventional measures to tackle undershooting inflation (deflation in other words) and he didn't rule out further interest rate cuts if that is needed. That ought to weaken the euro but it hasn't; perhaps because he has said much the same in previous speeches.

This afternoon brings the only interesting data of the day. We will get the US producer prices indices and the University of Michigan consumer confidence. Both are of interest but neither is expected to change the position for the US Dollar which is in stasis awaiting further clarity on the timing and US interest rate hikes and QE budget cuts.

And a Chinese man has been arrested for biting a police officer in Singapore. That usually wouldn't make it into this report but his name is Bai Ting. Who knew that would fulfil itself one day. I wonder if that is what Mr and Mrs Knight in Florida were thinking when they named their son Jed I.