Daily Market Comment

08.02.2010

The euro has started the week on the back foot versus the US dollar as it continues to be weighed down by growing concerns about the eurozone’s fiscal problems, despite the weekend’s reassurances from the weekend’s G7 meeting about support for reforms in Greece. Meanwhile, the euro, pound and dollar are all lower against the yen in response to the lower Asian stock markets. Risk appetite was also hit by talk of a global tax on banks, with such initiatives appearing to find support at the meeting of leading central bankers and finance ministers. Although off Friday’s low of $1.3586, its weakest level in over 8 months versus the USD, the euro remains vulnerable to fresh selling over the coming days as the focus remain on the headwinds that the eurozone is facing.

Weekly Market Brief

05.02.2010 WEEKLY MARKET BRIEF - 5TH FEBRUARY 2010

Key Data for Week 8th - 12th February 2010

Monthly Housing Market Bulletin

08.02.2010 Housing Market Bulletin - February 2010

Yet again the question of the extent of the supply of vacant unsold properties has resurfaced. The kernel of the problem is that an accurate assessment is difficult due to the lack of quality data. This leaves a reliance on a series of ‘estimates’ that are based on assumptions whose validity is wide open to debate. We believe that Census 2006 did not give accurate level of stock overhang due to an underestimation of holiday homes and no account for a ‘normal’ level of vacancy. Indeed market dynamics do not suggest large level of overhang of excess stock in 2006. There has undoubted been a significant build in vacant stock since 2006. However, it is difficult to see the overall total of excess stock being anywhere near the 300,000 level that some commentators have suggested.

Central Bank Watch

04.02.2010 ECB Watch February 2010

At its policy meeting today, the European Central Bank again left its refi rate unchanged at 1% for the ninth month running. Mr Trichet repeated again today that the refi rate is at an appropriate level, suggesting that the ECB is not considering changing rates any time soon. The subdued outlook for inflation, weakness of monetary indicators, high and rising unemployment and doubts about the strength and durability of the upswing in activity all point to a prolonged period of low interest rates. Thus, it is still our view that it will be late this year at the earliest before the ECB starts to contemplate rate hikes.