Awaiting Ecofin after CenBank Liquidity Drives

Markets look to Ecofin after yesterdays central bank intervention, Europe trade balance, UKs Osborne speaks in wake of poor data this week, will US Michigan confidence improve. RBI raised to 8.25% as was expected.

The European Economic finance ministers (ECOFIN) meeting in Poland starts today, and such is the concern about US events in Europe US Treasury Secretary Timothy Geithner will also be attending. Markets will be expecting to see European leaders finally grasp the nettle of the crisis in Europe with something more tangible than just words and rhetoric.

Yesterdays co-ordinated central bank action to turn on the liquidity taps in Europe, steps eerily reminiscent of 2008 and the Lehman crisis, may have averted a credit squeeze in the funding markets, but if anyone thinks it has eased the problems in the euro zone they could well be in for a rude awakening.

The problems surrounding the solvency of Greece havent gone away despite various calls for euro bonds, and with the troika set to return to Greece on Monday ministers will need to come up with more than words, otherwise markets will start to slide back again.

In economic news the European trade balance for August is expected to swing to a 1.7bn surplus after showing a 1.6bn deficit in July with exports expected to pick up.

In the wake of the poor economic data this week and the fears about the UK economy, markets will be listening for any change in tone when Chancellor George Osborne is due to speak. Concerns about the UK economy were not helped by yesterdays disappointing retail sales numbers for August which contracted by 0.2%, as rising prices eat into consumers disposable income, while the latest quarterly survey of inflation expectations showed that consumers continue to think that prices will continue to rise over the next 12 months.

Ashraf's PREMIUM TRADES are riding the countertrend in EURUSD & S&P500, here are rhe latest trades http://www.ashraflaidi.com/products/sub01/access/?a=495 To get a 1-week trial, click here http://www.ashraflaidi.com/products/sub01/

In the US eyes are starting to turn towards next weeks FOMC meeting after manufacturing data yesterday from Philadelphia and New York continued to show weakness. US Michigan confidence for September is expected to improve from to 56.6 from the previous reading of 55.7.