Just to prove there is an app for everything. If you like the sound of the South African vuvuzela (or are deaf) you can now download a vuvuzela app on your iphone. I can see this being very popular with those that enjoy being beaten up in public.
The Euro has continued to gain ground and is now 4.5% higher against the US dollar from the lows reached on 07 June 2010. Yesterday’s Spanish bond auction was successful with demand almost twice the supply of bonds on offer. The yield although over 2% above that of German bunds was less than the market was expecting also. This helped alleviate some of the concerns that Spain is on the verge of asking for bailout funds from the European Commission, IMF and US Treasury worth €250bn. If this rumour were true then it would be bye, bye Euro which would plunge to fresh lows in record time.
For now the concern is whether Spain is able to successfully tap the market for liquidity before their July deadline to payback €25bn. We are not entirely sure who was buying Spanish bonds yesterday but there is a strong suspicion it was the European Central Bank (ECB). Ratings agency Fitch this morning warned that the ECB will need to buy hundreds of billions of bonds to prevent the Eurozone debt crisis spiraling out of control.
Yesterdays US data was disappointing with weekly jobless figures and June Philadelphia Fed manufacturing figures both disappointing.
UK May ONS public finance figures released this morning showed a better than net public sector borrowing of £16bn compared with the market consensus of £18bn.
With no major economic data releases of note left this week the markets are awaiting Tuesday’s budget. What we are hoping for from Chancellor George Osborne is a stern budget which addresses the mess our public finances are in. Spending cuts, welfare payment cuts and tax rises are a definite and will be welcomed by markets and the ratings agencies as necessary to maintain our triple-A rating and reduce the deficit.
What we don’t want to see is a harsh budget containing massive cuts in public spending and huge taxes rises which pour water on the embers of the fragile UK recovery. This budget is viewed as the most important in decades, so the future of the pound is at stake. Prudency and austerity are acceptable and will underpin sterling. Wholesale slash and burn will kill growth and with it the pound.
A vicar of a parish near Marlborough has revived an ancient law to call members of her parish together for compulsory archery practice. The Reverend Mary Edwards said: "It’s an unrepealed law from the Middle Ages and I can call all the men, but I’ve extended it to all people, to archery practice". Hopefully for members of the parish Reverend Edwards won’t bring back another parish law where the church imposed heavy taxes to support the church. There may not be much left in the cookie jar after the Chancellor’s budget next week!
Good luck to the England football team tonight in their match against Algeria. As long as they don’t play like the very poor French did against Mexico last night they should be ok.