Wise money markets wait on Bunderstag votes

The Bunderstag is today expected to give the green light for Angela Merkel to push ahead with the bail out of the Spanish banks.Wise money markets wait on Bunderstag votesGerman participation in the bail out is a must and the markets remain nervous about the potential for a delay on the decision, ala the decision on the ESM by the German constitutional court.

However, it is likely that the vote will be passed as only a simple majority, rather than an absolute majority.

The euro is finding some strength as we build up to the announcement, but its path today is entirely down to the result of the vote.

Eurozone data today is confined to low level Italian industrial output.

UK retail sales are also due later today.

Modest gains are expected but the effects of the extreme wet weather will undoubtedly have a real drag on the numbers.

The monthly figure is expected at 0.4%, but something closer to 0% would not be a shock.

Sterling remains in a Euro-Dollar sandwich and is unable to find any traction on the back of UK related data or news flow.

Public sector finances figures are due tomorrow; the pressure is building on the Chancellor as the economy continues to slow.

The Prime Minister has reaffirmed the Government’s commitment to fiscal austerity this morning, but it is becoming increasingly clear that ultra-lose monetary policy by itself will not get us out of the mess we are in.

The Chinese authorities cut rates alongside the ECB and BOE earlier this month, so tomorrow’s business sentiment number will be watched closely as the Chinese economy slows.

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