Risk aversion still to the fore as Europe gets underway

Risk aversion remains to the fore as Europe gets underway.US Treasury Secretary Geithner yesterday disappointed the markets, giving few specifics on the plan to reform the US financial system. This has left the markets sceptical that the financial stability plan as it is now known will be enough to revive credit markets and inturn the US economy. EUR/USD is lower compared to where Europe left off Tuesday, presently down at 1.2915 compared to around 1.2965 while EUR/JPY is at 116.30 from around 117.60.

The main economic data release today will be UK jobless figures for January at 9:30 GMT. The consensus forecast for the UK claimant count is for a rise to 3.8% from previous 3.6%, reflecting an increase of 90,000 in the number of claims. The ILO employment rate for the three months to December is expected to have risen to 6.3% from previous 6.1%.

Later at 10:30 GMT we have the release of the latest Bank of England quarterly inflation report.