Brinkmanship in Europe spoils the party yet again

Eighteen-year-old Ere Karjalainen has set a new world record for throwing, and probably breaking, his mobile phone. According to organisers, the competition offers mobile phone users the unique opportunity to vent their frustrations that are caused by the equipment, either theirs or other peoples. They have suggested that there is a correlation between the amount of frustration and aggravation caused, and the length of the throw. Applications for next year’s competition are now being accepted, and could include former newspaper editors, footballers, film stars and a young Prince as the early favourite to break the record next year. 

Talking of frustration, investors might start their own Lob the Premier or Central Banker contest as they get increasingly frustrated with the goings-on in Europe. The Chinese Premier yesterday said that they would consider buying European bonds and the euro made some tentative moves higher, only to be stopped in its tracks when it was made known that Spain is delaying asking for a bailout until the terms of any deal are known, and the ECB are refusing to offer the bailout until Spain asks for it. The euro did an about-turn and investors were left to consider another case of brinkmanship from the powers that be.

Euro data didn’t help the currency, with euro-wide retail sales falling for the 10th successive month. On the plus side Italian bond yields fell at the latest auction, although Spanish yields rose after the impasse on the bailout came to light. In the UK it was announced that households are repaying their credit card bills at the fastest rate since 2006 and are increasingly reluctant to take on debt. The dollar releases were 2nd tier, but generally the markets were quiet. 

There was a slight move back out of the riskier currencies, with the US dollar gaining ground against both the Euro and Sterling. The CAD made some small gains, despite worse-than-expected trade figures and the Aussie hit a five-week low on China growth worries. The Yen was also a winner despite worse-than-expected production numbers.

Today will be about Jackson Hole and whether Ben Bernanke will signal any new stimulus for the US economy. There are some figures out of the US (Chicago PMI, Factory Orders, etc) and Europe (CPI, Unemployment, etc) but barring anything surprising from Big Ben, it could be a quiet end to the week. 

Next week could be more exciting with the Euro and UK rate announcements on Thursday but, in the meantime, entry forms are available for the Lob the Central Banker contest.