Equities have been stuck in reverse for most of the day with US ADP
employment figures causing declines to accelerate. Non Farm employment
fell by 693,000 from November to December, which way ahead of consensus
estimates. Adding to the gloom, major US blue chip companies, Intel and
Time Warner both posted earnings that fell below analysts estimates. In
the UK, Bellwether stock Marks and Spencer is marginally up on the day
after announcing figures that were largely in line with estimates. Much
of today's move started yesterday on the back of better than expected
earnings from Next and Debenhams.
On the currency markets, it is a rare strong day for the pound. Sterling
has retraced further away from parity against the Euro and is pushing
above the $1.5000 level against the US dollar. Analysts are
repositioning themselves as sentiment changes regarding the expected
severity of tomorrow's bank of England rate cut tomorrow. Interbank
lending has improved in the last month or so, which may mean the MPC
will cut by less than the 75 base points that many were expecting.
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