Loans rates rises looks less likely

Fed President Santomero spoke before the CFA Society of Philadelphia focusing on long term potential growth. He commented that while the US are getting close to full utilization in the job markets, strong productivity is helping to contain inflationary pressures.

US jobless claims declined to 278k versus market expectations of a rise to 295k. The lower level can partly be attributed to the East Coast blizzard.

German IFO released yesterday came in firmer than expected. The headline index rose to 103.3 from 101.8 substantially ahead of market expectation and the main factor in the push of EUR/USD through its key resistance. Improvements were seen in all sectors.

The data underpins expectations for further ECB tightening. EUR GBP remains under pressure after this weeks release of the Bank of England minutes prompted markets to factor in less likelihood of rate cuts in the UK.

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