Fallout from Irish bailout continues to effect the Euro

The fallout from the Irish bailout continues to reverberate around the bond and financial foreign exchange markets, with questions being asked about if, or more pertinently when, Portugal will ask for a bailout as well. Some commentators suggest that Portugal's handout application could come as soon as this weekend however, it is unlikely that negotiations would commence so quickly.

The ongoing uncertainties will undoubtedly cause debate amongst European Central Bank members, particularly regarding the next steps for monetary policy, but so far the ECB have proven deaf to calls for a relaxation of monetary conditions. Moreover, the economic strength of Germany, the engine of growth in Euroland, is being called into question so there is unlikely to be any respite for the Euro over coming sessions, but expect plenty of volatility. 

US data released was encouraging yesterday with consumer confidence and the Chicago PMI for November recording stronger activity and an improvement in confidence. The actual figures showed the Chicago purchasing managers' index (PMI) added two points to reach 62.5 and the Conference Board's index of consumer confidence improved from 49.9 to 54.1.

Putting the consumer confidence data into context, the rebound in US confidence has come after months of declines and the pick up in manufacturing is yet to create enough jobs to compensate for job losses in other parts of the economy.

Elsewhere, the Canadian Dollar took a cent-and-a-half hit after figures showed the economy growing at an annual rate of 1.0% instead of the expected 1.5% in Q3. As with Canada, Australia's gross domestic product grew by less than expected in the third quarter; 0.2% instead of the predicted 0.5%. The news meant buying Australian Dollars gave back more than a cent at the time but it has since more than made up the loss due to the result of a stronger than expected manufacturing PMI from China; 55.2 after 54.7 a month earlier.

Today's top billing for the rest of the day goes to the monthly manufacturing PMI shoot out from the UK and Eurozone with analysts predicting unchanged Euroland and declines for Britain and the United States. The US also chips in with ADP's employment change number and construction spending.