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Consumer prices in the eurozone slowed to a record low year-on-year increase of 0.6% in March, down from a 1.2% year on year increase in February, according to the Flash estimate released by Eurostat.

Eurozone inflation rate has never been this slow 1996 when records began. This is just the latest reason for the ECB to cut interest rates on the next monetary policy meeting on Thursday.

Pound Sterling – UK Markets

The UK economy will contract 3.7% in 2009 and output will also decline mildly in 2010, the Organisation for Economic Cooperation and Development has predicted.

The OECD said a recovery would start in 2010, with the weaker pound, a marginally improved global environment and the UK’s various policy measures helping lift the economy from a recession that started in mid-2008. However, the organisation said the economy would still contract 0.2% in 2010.

If right, the UK economy is headed for its deepest downturn since World War II. The economy hasn’t contracted more than 2.1% since records began in 1949. Only once – in 1980 and 1981 – has output fallen two years running.

The OECD’s latest forecasts represent a major downward revision for the UK economy. In its previous report in November, the OECD saw the UK economy contracting 1.0% in 2009 and growing 0.7% in 2010.

US Dollar – US Markets

Ongoing contraction is expected in the Institute for Supply Management’s Chicago Manufacturing report today, but economists suggest that the pace of deterioration in the sector could be slowing. The headline ISM Chicago PMI index is expected to rise to 34.4 from 34.2.

Euro – European Markets

French debt rose in the fourth quarter of last year to €1.33 billion, or 68% of GDP, up from the 66.1% of GDP it had reached in the previous three months, national statistics office Insee has said.

Last year, the budget deficit of the eurozone’s second-largest economy rose to 3.4% of GDP, up from the 2.7% of GDP the previous year, Insee said. France’s public accounts are feeling the pain of a worse than expected downturn, with GDP forecast to drop by at least 1.5% this year.

A report from national statistics office Istat shows that Italian retail sales rose unexpectedly in January. Retail sales rose an unadjusted 0.7% on the year, rebounding after having fallen for three consecutive months. Economists had anticipated a 2.2% drop on the year and a 0.2% drop on the month.

Germany’s unemployment rate rose to 8.6% in March as the global economic downturn continued to tighten its grip on Europe’s largest economy. In seasonally adjusted terms, the rate rose to 8.1% from 8%, official figures also showed. This equates to 3.4 million people, an increase of 69,000. Unemployment rates have been rising across Europe, with the Spanish jobless rate the highest at more than 14%.

Other Currencies – Highlights

Japan’s unemployment rate has risen to a three-year high as companies continue to slash jobs. The jobless rate rose to 4.4% in February, from 4.1% in the previous month, the government has said.

Separate data showed that consumer spending last month fell by 3.5% from a year earlier. Prime Minister Taro Aso is planning to announce a new package of stimulus spending to try to revive the world’s second-biggest economy.

The head of the International Monetary Fund has stressed the need for unity among world leaders at the G20 meeting in London next week. “It is absolutely necessary for leaders to find agreement,” said IMF managing director Dominique Strauss-Kahn. The UN has also called for urgent action at the G20 to prevent the financial crisis developing into a “catastrophe for human development”.

Pound Sterling – UK Markets

Mortgage approvals for house purchases in Britain rose more than expected in February, according to official figures from the Bank of England. There were 38,000 approvals in the month, up from 32,000 in January – the highest number since May 2008.

There was also the biggest net repayment of consumer debt since records began in April 1993. Consumers repaid £245m worth of credit more than they took out in February, having taken on an extra £165m of credit in January.

However, mortgage approval data hasn’t stopped the pound from tumbling today, after a report by the property industry group Hometrack showed that the average price for a home in England and Wales plummeted by a record 10.3 percent on year in March. March’s annual fall was the biggest yet in Hometrack’s monthly survey of estate agents and surveyors, which started in 2000 and has persistently reported lower price falls than official government data.

US Dollar – US Markets

Supported by lower oil prices, the US dollar soared in early training to a 12-day high against its UK, European and Swiss counterparts as concerns about the global economy prompted investors to seek the safety of the world’s most liquid currency.

However, the dollar has since slumped back against the yen amid fresh concerns about struggling US carmakers General Motors and Chrysler. The fall follows comments from a rescue task force that said their plans for recovery are “not viable.”

The euro, however, remains weaker against the greenback as investors anticipate European Central Bank policy-makers will reduce interest rates when they meet on Thursday.

Euro – European Markets

The Irish Republic’s economy has suffered its largest contraction in recent decades. The Irish economy shrank by 7.5% in the last three months of 2008 compared with the same period a year earlier, a report by the Central Statistics Office has shown.

The construction industry, which has faced a housing market slump, suffered a 24% fall in output, the biggest fall on record. In the whole of 2008 the economy shrank by 2.3%, the first decline since 1983. Ireland has experienced a sharp downturn, becoming the first eurozone country to fall into recession in 2008.

The economic crisis in Spain has taken a new turn on Monday after the country became the first in the euro zone to report disinflation on the heels of a weekend takeover of a Spanish savings bank by the government. Preliminary data showed that harmonised consumer prices fell 0.1% in March on an annual basis, against a 0.7% rise in February, according to the Instituto Nacional de Estatdistica. It was the first decline in consumer prices since the INE started tracking figures in 1961. Analysts had been expecting a rise in prices of around 0.4%.

Other Currencies – Highlights

Official figures show that Japan’s manufacturing output has fallen for the fifth consecutive month. Industrial production dropped 9.4% in February, but rebounded from January’s record 10.2% plunge, Japan’s Ministry of Economy, Trade and Industry said.

Retail sales growth in the UK almost stalled in February as consumers cut back on spending, figures from the Office of National Statistics show. Sales growth slowed to 0.4% last month, the smallest increase since 1995, after a 3.6% rise in January. Analysts had expected retail sales growth to slow to 2.5%.

Pound Sterling – UK Markets

The UK Treasury has failed to sell all its government bonds in an auction for the first time since 2002. The Debt Management Office has said that the Treasury wanted to sell £1.75bn of 40-year bonds, but investors only bid for £1.63bn of the debt. Analysts said this may reflect concern over the state of the public finances as government borrowing surges.

Meanwhile, the UK February Retail Sales Report has seen the Pound decline against the US Dollar.

US Dollar – US Markets

In a quiet day for US data, Treasury Secretary Timothy Geithner has defended the Dollar as the world reserve currency, a day after China called for it to be replaced. Pointing to the ongoing global financial crisis, China’s Central Bank governor, Zhou Xiaochuan called for a new reserve currency run by the International Monetary Fund.

Euro – European Markets

Following yesterday’s report that showed dire figures about German business confidence, German consumer confidence has declined for the first time in seven months. Workers are increasingly worried about keeping their jobs amid the worst recession since World War II, GfK AG’s confidence index for April shown.

According to the Dutch Central Bureau for Statistics, the Dutch economy shrank 0.6% on the year in the fourth quarter. In line with estimates, the Dutch economy in the fourth quarter contracted 1% from the previous quarter, according to the second estimate, which is a downward revision of 0.1 percentage point compared with the first estimate.

Spanish new housing starts fell 42% last year as a decade-long housing boom went bust, data from the country’s Housing Ministry has shown. Housing starts fell to 360,044 last year, from 615,976 in 2007. The resulting decline in housing investment pushed the wider Spanish economy into recession at the end of last year.

A report from Statistics Denmark has said the Danish seasonally adjusted jobless rate climbed to 2.5% last month from 2.3% in January. The figure, which is in line with forecasts, shows that Denmark’s unemployment rate rose in February for the fifth straight month. Denmark’s jobless rate has climbed steadily since September, when it was 1.7%.

Italian business confidence continued to fall in March, staying at its lowest level since records began in 1991, with recent bankruptcies painting a bleak outlook for the economy and exports, research centre ISAE has said.

ISAE said March business confidence in the Eurozone’s third-largest economy fell to 59.8 from 63.2 in February, well below expectations. A survey of 12 economists polled by Dow Jones Newswires forecast Italian business confidence at 62.7. In the report Thursday, ISAE said sentiment in the consumer goods sector fell to 72.1 from 76.8, while investment goods sentiment slid to 56.5 from 58.7.

Following these somewhat bleak reports, the Euro weakened against its major counterparts, before bouncing back slightly against the Swiss Franc.

Other Currencies – Highlights

The Shekel-US Dollar exchange rate rose 1% in morning inter-bank trading and the Shekel-Euro exchange rate rose 1.68% after the Bank of Israel announced yesterday evening that it would continue to buy US Dollars.

Gordon Brown will repeat calls for greater fiscal stimulus and more financial regulation on a visit to the US as part of his pre-G20 summit tour. The prime minister’s strategies for reviving the economy appear to have been broadly backed by US President Barack Obama. Brown is touring three continents ahead of next week’s G20 summit, calling on governments to back plans for possible further stimulus action.

Pound Sterling – UK Markets

Answering questions from MPs at a Treasury committee meeting, Mervyn King, the governor of the Bank of England, has warned against further significant government spending to stimulate the economy. Given the high levels of UK debt as a result of recent stimulus packages, Mr King questioned the wisdom of increasing debt by spending more.

Following yesterday’s surprise jump in British consumer price inflation to an annual rate of 3.2 percent, Sterling fell against the US Dollar and Euro, giving back some of the previous session’s gains as investors reconsidered the unexpected rise in inflation.

US Dollar – US Markets

Barack Obama has told Americans he sees signs of economic recovery, but has urged them to be patient and look beyond their “short-term interests”. The US president said his draft budget would build a stronger economy which would mean America did not face a repeat crisis in 10 or 20 years. Obama’s $3.6tn budget faces its first tests in Congress this week.

Orders for US durable goods are predicted to have fallen in February for a seventh straight month as the global slump in business spending deepened, economists said before the release of data from the US Commerce Department today.

Bookings for goods meant to last several years decreased 2.5%, according to the median forecast of economists surveyed by Bloomberg News, after dropping 4.5 percent in January. A report on new-home sales, also from the Commerce Department, is anticipated to show sales of new houses declined to the lowest level on record.

Euro – European Markets

Germany’s Munich-based Ifo Institute for Economic Research released a German business confidence survey earlier today. The business confidence index has dropped to a historical low of 82.1 in March from 82.6 in February. The Euro has now gained slightly against its major counterparts.

According to research centre ISAE, Italian consumer confidence fell more-than-expected in March as households’ view of the overall economy and employment opportunities slipped. ISAE said the seasonally adjusted consumer confidence index for Europe’s fourth-largest economy dropped to 99.8 from 104 in February, returning to levels last seen at the end of 2008.

ISAE said consumers’ expectations of their overall economic situation fell sharply to 62.1 from 70.4, while views on rising unemployment increased to 115 from 97. Views on their personal situation dropped to 118.3 from 120.7.

Other Currencies – Highlights

Japan’s exports saw a record plunge in February, falling by nearly half compared with a year earlier, according to the country’s finance ministry. In line with forecasts, exports fell 49.4% year-on-year to 3.526tn yen ($36bn; £24.6bn). This data comes after figures for January showed year-on-year exports nearly halved that month as well.

The South African Rand was softer against the US Dollar in early trade today, moving back into the 9.50s, as some nervousness about global stock markets returned to the markets.

Union leaders from the UK and overseas have put forward a global five-point plan they want G20 leaders to adopt as a way of tackling the economic crisis. The plan includes job creation, some bank nationalisation, tackling wage deflation, and climate change action. The G20 meeting, which will be held in London in early April, brings together leaders from industrial and emerging market countries that make up 85% of the world economy.

Pound Sterling – UK Markets

The CBI has called on the chancellor to use the Budget for ‘confidence building’ measures to boost jobs, investment and competitiveness. The UK’s cumulative deficit for the fiscal year so far is £75.2bn, raising the chance annual government borrowing will exceed its own £77bn forecast. CBI deputy chief John Cridland said the public finance outlook was “alarming”. Last month the CBI predicted that the government will have to borrow £100bn more than anticipated during the recession.

US Dollar – US Markets

Details have been released of a $500bn US Treasury plan to encourage private investors to buy up toxic debts. The ‘Public-Private Investment Programme’ will purchase the troubled mortgages and securities that have been at the root of the credit crisis from banks.
It will initially provide financing for $500bn of toxic assets, with the potential to expand up to $1tn. The plan is due to be formally launched later today.

The US Treasury’s plan to help banks offload their soured loans has promoted broad Dollar-selling and the Pound has hit a one-month high against the greenback. The Dollar is also down further against the Euro.

Euro – European Markets

European Central Bank President Jean-Claude Trichet has said his bank can cut interest rates further but that its deposit rate is already at a very low level. Trichet added it could also use more non-conventional measures to help the troubled banking system. “As regards the future rate of our main refinancing operations, presently at 1.5 percent, I said clearly that we could decrease it again,” Trichet said in an interview with the Wall Street Journal

Other Currencies – Highlights

The New Zealand Dollar has spiked up to new multi-month highs of against the Japanese Yen and the US Dollar during Monday’s early trading. Against the Euro, the Kiwi is now trading near a new multi-week high.

The Australian Dollar too has staged a strong rally against its major opponents on Monday morning. The Aussie jumped to a new multi-month high against the Yen and a 10-week high against its US equivalent. At the time of writing, the Aussie is also advancing towards a multi-day high against the Euro.

The head of the Organisation for Economic Cooperation has echoed a statement from the IMF by saying that the world economy will most likely shrink this year. Angel Gurria, head of the body that represents the 30 most industrialised nations, said, “We are probably seeing a world which will go negative.”

Pound Sterling – UK Markets

A report from the Confederation of British Industry claims that demand for UK exports has slid to a new low, despite the 25% fall in the Pound over the past year. The business lobby group said that 51% of firms reported that their export order books were below normal in the past month. It is the lowest level for this measure in a decade. The finding will dash hopes that the weak Pound will help support the UK economy throughout the recession. Meanwhile, expectations for export orders remain close to a 30-year low.

Although UK economic data this week has continued to point to a deep downturn, Sterling has risen against the US Dollar today. The US currency set for its biggest weekly percentage fall since the early 1970s after the Federal Reserve’s shock move this week to buy long-term Treasuries.

US Dollar – US Markets

The House of Representatives have voted in favour of a bill to levy a 90% tax on bonuses over $250,000 from firms bailed out by taxpayers. The move follows outrage over the decision by AIG to award its employees $165m in bonuses after taking $170bn in aid from the government. House Speaker Nancy Pelosi said, “We want our money back and we want our money back now for the taxpayers.”

With the Federal Reserve introducing quantitative easing after the unexpected announcement that it will start buying Treasuries, the Dollar is trading near a two-month low against the Euro, and is heading for a record weekly drop. The US currency is on course for a second weekly decline versus the Yen and both the Australia and New Zealand Dollars are also heading for third weekly gains against their American equivalent.

Euro – European Markets

The EU has said it may double the amount of emergency funding to help members in need of urgent budget support to €50bn. European Commission President Jose Manuel Barroso said he was confident the deal would be reached on the final day of a two-day summit in Brussels.

Spain continues to experience one of the Eurozone’s most pronounced economic downturns, with a Spanish Statistics Institute report showing that Spanish industrial orders fell 30% on the year in January, the biggest drop since 2002 when the country began recording the data. Orders for durable consumer goods dropped 33%, while non-durable consumer goods orders decreased 7.8%.

Other Currencies – Highlights

Asian currencies rose, and are heading for their best week against the US Dollar this year, following optimism that stimulus spending plans will avoid a deeper global recession.

South Korea’s Won and Taiwan’s Dollar rallied after central banks in the US, Japan and the UK announced plans to buy bonds, increasing the supply of Dollars, Yen and Pounds. The MSCI Asia Pacific Index of regional stocks was set for its biggest weekly advance since August 2007 and the cost to protect Asian debt outside Japan fell.

Scottish MPs will question senior executives from Royal Bank of Scotland and Lloyds Banking Group – two of the banks given multi-billion pound bailouts by the government.

The Scottish Affairs Committee will hear from Gordon Pell from RBS and Archie Kane from Lloyds, and Alasdair Darling will be questioned further about the massive pension paid to former RBS chief executive Sir Fred Goodwin. Scottish Secretary Jim Murphy has accused Sir Fred of ”banking vandalism” and called his £16m pension fund “extraordinarily distasteful”.

Pound Sterling – UK Markets

A report released by the Office for National Statistics says that the UK public sector borrowed more than expected as central government tax revenue fell sharply on the year and spending continued to rise.

The UK public sector borrowed £9bn in February, a steep increase from £1.1bn a year earlier. Expectations for net borrowing were around £7.7bn and the reported level is the highest February borrowing figure since records began in 1993.

A report from the Council of Mortgage Lenders says that the slump in mortgage lending continued in February with gross lending down by 60% on February 2008. Lending, at £9.9bn, was 15% lower than in January, and was the lowest figure for any month since February 2001. The CML said its members’ ability to lend was drying up because too many savers were choosing to put their money in National Savings policies. Mortgage rationing has led to house sales falling by more than half.

US Dollar – US Markets

The Federal Reserve has said it will buy almost $1.2trn worth of debt to help boost lending and promote economic recovery. The Fed said it would start buying long-term government debt and expand purchases of mortgage-related debt.

The size of the move has stunned investors, and caused the Dow Jones stock index to jump almost 200 points. It is hoped that the measures will boost mortgage lending and the struggling housing market by lowering interest rates on mortgages and other forms of consumer debt.

The news caused a mammoth drop for the US Dollar. The greenback experienced its third biggest one-day decline yesterday since daily pricing began back in 1970, bringing a swift end to the rally that had pushed the Dollar to the highest levels since 2006. The greenback ended the day down against both the Euro and the Pound, and reached a three-week low against the Canadian Dollar.

Euro – European Markets

According to the Dutch National Bureau for Statistics, Dutch consumers are more pessimistic in March compared to a month earlier. The Dutch consumer confidence index stood at -34 in March, falling from February’s reading of -30. The bureau added that consumers have never been so pessimistic about the economy.

The bureau also released a report showing that the Dutch unemployment rate was 4.1% in the three months to February 2009, up from 3.9% in the previous three-month period, marking the third such period in a row in which unemployment has increased.

Other Currencies – Highlights

Excluding the Yen, all of the ten most-active Asian currencies have strengthened against the US Dollar. The Yuan rose to its strongest level this year, as the People’s Bank of China set the reference rate at the highest level in more than three months.

Meanwhile, analysts are predicting that the Indian Rupee will fall beyond record lows in the coming months, as the Reserve Bank of India focuses on supporting the government’s spending measures and attempts to stifle a market sell-off that has driven the yield curve to its steepest levels in 11 years.

The International Monetary Fund has predicted that the recession will last longer in the UK than in any of the world’s other major economies.

The IMF has warned that the UK will be the only member of the G7 group of leading industrial countries that will continue to see its economy shrink in 2010. The IMF said the UK economy will shrink 3.8% this year and 0.2% in 2010. By contrast, IMF predictions see the G7 nations will see their economies decline 3.2% on average in 2009, before growing 0.2% next year.

Pound Sterling – UK Markets

Official figures due out later today are expected to show that the number of people in the UK who are unemployed has risen to more than two million for the first time since 1997. Analysts predict that the data for November to January will show that the number of people out of work rose by more than 150,000 during the period. The TUC had claimed earlier this week that there are now 10 jobseekers for every vacancy advertised in UK jobcentres.

The thirteenth consecutive monthly increase in claims was significantly larger than the market consensus estimate for a rise of 87,500 in a Dow Jones Newswires survey of economists last week. Other data released by the Office for National Statistics showed that the number of job vacancies slumped to its lowest level since comparable records began in 2001, while the number of redundancies soared to its highest level since that series started in 1995.

Proposals aimed at overhauling the rules governing UK banking and stopping a repeat of the financial crisis are to be unveiled by the City watchdog. Financial Services Authority chairman Lord Turner will put forward new rules on lending and seek to restrict the ability of banks to take excessive risks. The plans will aim to stop banks lending too much during boom times, which may include limits on home loans. Lord Turner will also recommend that banks publish more and clearer information in their accounts about the risks they are running. A proposal to form a new pan-European body will also be mooted, to set standards for other regulators to follow.

US Dollar – US Markets

Federal Reserve policy makes are set to debate today what to do about the deepening US recession. Officials will determine how to provide further stimulus to the economy, from purchasing more mortgage bonds to buying Treasury securities. They’ll also keep the benchmark interest rate as low as zero percent, according to all 71 forecasters in a Bloomberg News survey.

At least three of the top Fed officials want to buy Treasuries or target the supply of money, while Chairman Ben Bernanke has favoured reviving specific credit markets. The Federal Reserve aren’t alone in mulling this problem; central banks worldwide are grappling with how to set policy when rates are near zero; the Bank of England started buying government debt this month, and the Bank of Japan said today it would increase its purchases of sovereign bonds.

Elsewhere, data released late on Tuesday showed unexpected strength in the housing market, with a 22.2 percent surge in U.S. housing starts in February. These figures eased fears about the worst-case scenario of another deflationary depression.

Euro – European Markets

European stocks have opened firmer today, as renewed confidence and positive sentiment outweighs the dismal global economic backdrop hanging over the markets. The Euro its highest level in over six weeks against the Pound, with investors trying to position themselves following the UK jobs data, as well as minutes from the Bank of England’s last policy meeting.

Buoyed by improved investor confidence after surprisingly upbeat German data, the Euro has been holding close to a one-month high against the US Dollar.

Other Currencies – Highlights

Retail sales in Switzerland increased 1.2% in January after rising at an annual pace of 3.6% in the previous month. Ahead of the release, the Swiss Franc ticked down against the Euro and the US Dollar, but advanced against its other major counterparts.

The breakdown of the report showed that demands for electronic goods rose 9.8%, while sales of healthcare products increased 6.5%. However, discretionary spending on personal goods plunged another 12.1% after falling 20.0% in the previous month, and was followed by an 8.1% drop in cultural goods.

The fall in UK house prices gathered pace in January, according to the government’s own house price index. Prices were 11.5% lower than in January 2008, an increase in the 10.2% annual fall seen in December. The price of the average UK property is now down to £195,724, a fall of £26,034 in the past year. Prices have been falling fastest in Northern Ireland, down 14.3%, and are still highest in London, where the average home costs £301,383.

Pound Sterling – UK markets

Yesterday’s confirmation that Barclays is in talks over the sale of its exchange-traded fund business iShares helped the pound make some gains yesterday. However, both the Euro and the US Dollar have now clawed back their early losses with Sterling now approaching six-week lows against the Euro as a five-day run of stock market gains faltered.

Elsewhere, figures show that online shopping is bucking the downward trend on the UK High Street, as latest figures show the ‘e-tail’ sector made a 13% annual sales increase in February. Despite the annual increase, online shopping figures fell in February by 11% from the month before, online retail research group IMRG Capgemini said.

US Dollar – US Markets

Federal Reserve Chairman Ben Bernanke and other policy makers may have to ramp up their purchases of mortgage securities and other assets after the economy and job market deteriorated further since they last met.

Analysts say that the Federal Open Market Committee need to redouble their efforts after the central bank’s balance sheet shrank 17 percent from a $2.3trn peak in December. This retreat came even as Bernanke acknowledged the chance that the unemployment rate will exceed 10 percent for the first time in 25 years.

The US Dollar has remained under pressure following gloomy economic data including the Empire State manufacturing survey, which fell 4 points in March to -38.2, a new record low. Meanwhile, the housing market index from the National Association of Home Builders (ranked on a scale of 1-100) was unchanged at 9, from January’s all-time low of 8.

Euro – European Markets

Appetite for riskier trades boosted demand for the Euro, with the US Dollar falling to a five-week low against the single currency. Hopes that money from the International Monetary Fund will be used to help ailing Central and Eastern European economies also increased demand for the Euro, analysts claimed.

The Centre for European Economic Research German economic sentiment survey will be released today and is expected to fall to -90 from -86.2 in February. Meanwhile, economic sentiment is seen at -8, down from -5.8 in the prior month.

Meanwhile, Spain’s National Statistics Institute have released a report that shows Spanish home sales fell 39% on the year in January, pointing to a deepening correction for Spain’s once-flourishing home-building industry. Sales had fallen by 26% in December and 36% in November.

Other Currencies – Highlights

Following the release of minutes of the recently concluded Reserve Bank of Australia meeting the Australian Dollar has fallen to a four-day low against the Euro.

The minutes have raised hopes that the RBA will cut interest rates as early as April to help the economy combat recession – helping to lift market sentiment despite lingering doubts about the global economic outlook.

Barclays have confirmed this morning that they are in talks with the Treasury over its potential participation in the government’s Asset Protection Scheme. Lloyds Banking Group and RBS are already signed up to the scheme. Barclays said that any decision on whether it would participate in the scheme would be based on “the economic merits to shareholders.”

Pound Sterling – UK markets

Barclays also confirmed that it is seeking to raise around £4bn by selling part of its £706bn iShares fund management arm in a further attempt to raise capital without turning to the government for any direct financial support.

There is now an average of 10 jobseekers for every vacancy advertised in the UK, the TUC has warned. The situation is worst in the South East of England where the trade union body said its research found 60 people chasing each job.

Official unemployment data compiled by the Office for National Statistics will be published on Wednesday and are expected to show UK unemployment at two million. Meanwhile, the British Chambers of Commerce estimated last week that UK unemployment would reach 3.2 million – or just over 10% of the workforce – by the second half of next year.

US Dollar – US Markets

Federal Reserve Chairman Ben Bernanke suggested in a televised interview on CBS’ 60 Minutes programme that the US recession would “probably” end in 2009, but that his country had averted the risk of plunging into a depression. Bernanke’s remarks came ahead of a two-day meeting by the Fed that begins tomorrow. It’s anticipated that they will launch some new programmes or expand existing ones to get Americans spending again. Any decisions are likely to be made public on Wednesday.

Under pressure insurance group AIG has revealed that it has spent billions of Dollars in taxpayer funds since its September bailout, with €105bn flowing to US states and banks including Goldman Sachs, Societe Generale and Deutsche Bank. Donald Powell, former chairman of the Federal Deposit Insurance Corp, sad the news “puts a sour taste in the American taxpayer’s mouth.”

US data revealed that retail sales fell by just 0.1% compared with the same month last year, better than the 0.5% drop analysts were expecting. American consumers have become more cautious amid difficult economic conditions, cutting back on more expensive items such as new cars, but continuing to flock to supermarkets and discount stores in search of bargains.

Euro – European Markets

Risk appetite continues to dominate European markets, which are posting increases above 2% today, with the EUR-GBP rate returning to its highest level since late February.

The Euro rose against the US Dollar as financial ministers from the G20 concluded their summit in London over the weekend, vowing to do “whatever is necessary” to fix the global economy. This statement is likely to include measures to supervise freewheeling hedge funds and restore bank lending by dealing with the shaky securities burdening their finances.

During the G20 meeting, Russia proposed the creation of a new reserve currency to be issued by international financial institutions. Leaders of the G20 leading economies will meet next month in London, with Russia calling for countries whose currencies currently have reserve status to adopt international rules on fiscal and macroeconomic discipline.

Later today, the European Monetary Union will release the Consumer Price Index and Employment Change figures for February.

Other Currencies – Highlights

The Swiss Franc has suffered its biggest ever single day drop against the Euro. The drop was triggered by news that the Swiss National Bank (SNB) will buy overseas currencies to try and stop its own currency rising further against the Euro.

Japanese stocks have risen almost 2% as the Japanese Central Bank considers buying loans and bonds to bolster its capital. The news has boosted Asian markets, with the Indian Rupee rising to its highest level for two weeks.