• UK Trade Minister Davies: Not worried about further slide in pound. Would help export competitiveness which inturn would help drive UK out of recession
  • Swiss February retail sales fall -3.8% y/y after +1.2% y/y rise in January
  • BOE’s Blanchflower: Labour Government must use Budget next week to stem UK jobs crisis
  • SNB’s Roth: Some signs of Swiss economic stabilisation, but near-term outlook bleak.
  • BOE’s Barker: Now clear inflation targetting alone cannot produce a stable economy
  • Moody’s places Ireland’s AAA credit rating under review. S&P and Fitch have already cut Ireland’s rating
  • Euro zone February trade deficit -2.0 bln euros (vs median forecast of -5.0 bln) Exports fell 24% y/y, imports down 21% y/y

Swissy and sterling weakness are probably two of the main features this morning.

EUR/CHF is presently up around 1.5200 from an early 1.5120. The swiss franc was initially underminned by the release of weak retail sales data and then lost further ground on comments from SNB Chairman Roth.

Swiss February retail sales fell -3.8% y/y after a +1.2% rise in January. SNB’s Roth says that while there are signs of Swiss economic stabilisation, the near-term outlook is bleak. He doesn’t see turnaround before 2010 and even then recovery will be slow. SNB will continue with forex intervention as long as deflation remains a risk.

Cable slumped early and hasn’t recovered. The move was triggered when comments from UK TradeMinister Mervyn Davies hit the wires. He said he is not worried about a further slide in the pound, as a weak currency would help improve export competitiveness and help drive the economy out of recession. It was all the excuse the market needed. EUR/GBP is up at .8850 from an early .8810.

EUR/USD remains heavy, but not too far from opening levels. Sits presently at 1.3085. Overnight comments from Trichet continue to weigh somewhat, the ECB President stating that we “must do all” to bring about recovery. He said a decision on no-standard measures will be made on May7 and that these measures need to be implemented with active bank participation. Pretty much confirmation, as if it were needed, of lower rates, quantitative easing next month.

USD/JPY is once again on the sidelines, at 99.40 all but unchanged on the day.