• German Q-4 GDP confirmed at -2.1% q/q, -1.7% y/y.
  • Italian Dec retail sales flat m/m, -1.9% y/y (vs forecasts of flat and -1.7% respectively)
  • UK Q-4 GDP -1.5% q/q , -1.9% y/y (vs forecasts of -1.6% and -1.9% respectively)
  • ECB’s Weber: Situation in money markets remains tense.
  • Bloomberg: “EU officials concerned about risks of pound drop.”
  • Highlights from ECB’s Ordonez in Spanish Congress.
  • BOE’s Sentance: Possibility of more rate cuts, but may have limited impact.
  • Choppy old day for sterling. Cable started off in fine fettle. Rallied briefly post GDP data release from 1.4565 to around 1.4585/90 and its been downhill ever since, presently at 1.4380. While the headline Q-4 GDP data, if anything was very slightly better than expected, it still confirmed that the UK is stuck, mired in deep recession. Also weighing on sterling was talk of European sovereign month-end EUR/GBP demand. BOE’s Sentance came out saying that there could be more rate cuts, but they’d have little effect on the cost of borrowing in the real economy. He is an advocate of quantitive easing, boosting the money supply.