Personal consumption makes up 70% of the Us economy so the market will look closely at the data due at 12:30 GMT. Expect to see another jump in the US savings rate as the average Joe pulls in his horns and repairs his personal balance sheet. Spending is expected to have fallen 0.9% in December.
Later in the morning, we get the ISM report. The manufacturing index is expected to edge down to 32.6 in January from 32.9.
The stimulus plan looks like it is going to undergo radical surgery in the Senate, thank goodness, while bank bailout plans will have to wait at least another week.
Risk aversion remains a key feature today as does a renewal of GBP weakness as PM Brown said that the UK would not intervene to support it. Staying out of the euro has given the UK flexibility the worst-off euro zone countries do not have, the ability to let the currency adjust. Brown sees no sense in preempting that process and I can’t fault him for it.
