Greece, UK Polls Ensure Lower Open For GBP

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• Dollar strong as fears increase

• Sterling weak after poll shifts focus to ‘hung parliament’

• US unemployment mixed; Non-Farms worse, Unemployment rate better

Today we have published our ‘World First Economic Calendar’ (attached to this email). This calendar seamlessly fits into your existing Outlook calendar and details the important releases for upcoming week. Each entry includes the measure’s previous reading and what the market expects this time (figures are subject to change). Simply open the attachment (selecting replace if you downloaded last week’s)

Further dollar strength was seen on Friday as the belief that Greece’s problems have spread to other southern European states caused investors to dive headfirst into haven assets.

The dollar continued to push the euro lower in a move reminiscent of the dark days when phrases such as ‘credit crisis’, ‘bailout’ and ’sovereign debt risk’ were confined to the pages of textbooks. Similar moves will be seen unless confidence is restored, and restored quickly. Restoring confidence however is the financial equivalent of nailing jelly to a wall; normally it just ends up in a mess.

Global confidence was helped slightly by the US jobs figures published Friday. Although the Non-Farm figure missed its consensus by 40k jobs and is still in negative figures this was offset by the improvement in the unemployment rate from 10% to 9.7%. More Americans in work is a good thing that is worth waiting for.

With the sterling rabbit still stuck firmly in the market’s headlights in the no man’s land that is this week between the Bank of England rate decision and Wednesday’s Inflation Report we think sterling may swoon. There’s data for sterling which would ordinarily see it jump up faster than a stabbed rat (Wednesday’s manufacturing production figures come to mind) but with the tanker that is the inflation report bearing down on us I see little upside in the coming days. I recommend covering short term liabilities at current levels. Speak to your trader or corporate representative should you wish to.

As we have frequently warned politics has hurt sterling this morning as fears over a ‘hung parliament’ increased. A joint poll between The Sunday Times and ICM showed that the Conservative lead has fallen to less than 10 points.

The data calendar is quiet today and we expect equity and risk markets to drive things in the session.

Latest Exchange Rates At Time Of Writing