The buoyant investment bank earnings from Barclays and HSBC and the rise above 50 for the UK Manufacturing PMI is certainly helping the glass half full optimists, but the rise in bad debts, HSBC up 39% and Barclays up 86%, is very worrying and raises doubts over how well HBOS are coping in this environment. Also while the rise in the Manufacturing PMI above 50 is a good sign, the larger and more important figure will be the Non-manufacturing reading due on Wednesday. The debate over whether the BOE will extend their Q/E on Thursday will play out in the next few days, but this correspondent feels that the policy makers around the globe are less enamoured than the markets by the green shoots that are appearing and will vote to extend the emergency measures.
Cable, having hit a new high for 2009 earlier at 1.6880, has settled down somewhat to trade at 1.6850. The short term target for bulls is at 1.7000, but it seems that we’ve moved our range from 1.60/65 to 1.65/70 as the Dollar malaise intensifies.
