Bank Levy Announcement

UK Chancellor George Osborne spoiled the day for Sterling yesterday when he announced that he would be bringing forward his levy on banks, going for a big-bang approach rather than phasing it in gradually. The levy will cost the banks will be around £800 million which shouldn't be too much of a problem considering some will be paying more than that in bonuses over the next couple of months.

In the absence of anything else upon which to focus, it put a damper on Sterling and the FTSE however, Sterling was not quite the worst performer on the day, that honour went to the Swiss Franc.

It was one of the main laggards though, giving up nearly a cent against the US Dollar and more than half a cent against the Euro. The Swiss Franc's ongoing problem is that it strengthened steadily as investors wanted its safe-haven protection against financial and economic woes. Now they are regaining their confidence they are not so bothered about that perceived safety.

Accompanying Sterling among the tail-enders was the New Zealand Dollar. As with Sterling it was the finance minister that spoiled it for the Kiwi. Bill English told parliament it was "possible" the NZ economy slipped into recession in the second half of last year.

Today opened with an improvement in Westpac's index of Australian consumer confidence from -5.7% to +1.9% and an acceleration in the BRC's shop price index from 2.1% to 2.5%. J

Germany has announced an improved trade surplus of €14 billion for December and Britain is next up with its own December trade imbalance. There is nothing else on the agenda until around midnight when Japan reports on core machinery orders and Australia reveals January's employment data. Federal Reserve Chairman Ben Bernanke speaks this afternoon on the US economy and the dollar. Absent any surprises from the data or the Fed chairman it looks like another day of aimlessness.