Uncertainty and austerity affects market sentiment

Nerves still appear to be frayed in the markets with concerns over Euroland debt problems, the Irish banking system, further quantitative easing measures in the UK and US and the UK Government's austerity plans have all affected sentiment.

In the US, the first step towards a currency bill was passed yesterday which allows US companies to petition for levies to be introduced on imports that benefit from abnormal currency rates. It is a dangerous game to play as it could hamper US investments and the US Governments ability to finance it's deficit.

Sterling faired fairly well yesterday, holding steady against the Euro after the previous day's falls and making slight gains against the Aussie and Kiwi Dollars. There was a slight fall against the US Dollar but £/$ 1.60 still remains in sight.

UK data though wasn't as strong with a fall in mortgage approvals in another worrying sign for the housing market. Eurozone industrial confidence improved to -2 in September from -4 in August, surprising the market against forecasts of -5, the highest level since May 2008; however, the data was overshadowed by the strikes in Spain and protests in Brussels.

Overnight, a -4.7% monthly fall in Australian building permits and an even more startling -17.8% decline in New Zealand building permits were unhelpful to the antipodean dollars.

There is no UK data today with European data limited to German unemployment and Euroland inflation. In Canada and the United States the latest GDP figures are published.