Tuesday 7th September 2010

UK

British retail sales growth accelerated last month, but discounting played a part in the improvement and consumers remain reluctant to splash out on expensive items.

The British Retail Consortium said retail sales values were 1.0% higher than a year ago in August on a like for like basis.

EURO

11.00 – German Factory Orders exp 0.5% for Jul

11.00 – German Factory Orders YoY exp 20.6% for Jul

The Euro weakened overnight on a Wall Street Journal report stoking fears about the viability of European banks by highlighting the weakness of euro zone stress tests earlier in the year.

The Euro was further pressured as Germany's banking association said last night that the country's 10 biggest banks may need 105 billion euros of additional capital under a revamp of banking rules designed to prevent future financial crises.

JAPAN

The Bank of Japan took no new policy steps at its meeting today.

The central bank boosted its cheap loan scheme at an emergency meeting last week, bowing to government pressure for steps to protect a fragile recovery after the yen surged to a 15-year high against the dollar, though the move's impact has very little effect.

AUD

The Reserve Bank of Australia kept interest rates at 4.5% as expected today.

While the central bank is generally upbeat on the Australian economy, it mentioned some uncertainty about overseas demand.

The Australian currency eased back today after two key independent lawmakers backed the Labor party, giving Prime Minister Julia Gillard the majority she needs to form a government.