The positive news for the mining sector yesterday allowed markets to record modest gains after the FTSE looked like it might make further losses in the afternoon session.

Gains for US markets were initially capped by poor retail sales numbers but Intel’s numbers last night provided some support.  Their numbers were impressive and it comes as a bit of a surprise that the US futures didn’t make further gains after the close.  The market was disappointed to see that their actual sales declined overall, despite a record quarter for revenue.  As a result the European indices are set to open flat or just slightly in the black.  On the earnings front the big US banks are due to commence their reporting with JP Morgan today.

The dire US retail sales took the market by surprise somewhat and whilst it will help to ensure interest rates won’t move higher anytime soon, at the same time investors paused to reflect on numbers that were meant to be much better and were actually terrible.  With consumers making up some 70% of the US economy it’s a significant piece of data, especially since it covers the crucial Christmas period.

The FTSE has moved sideways since Monday’s attempt at 5600 and the range of the last three days has only been some 90 points.  With lots news that you’d expect to move the indices nothing has materialised and the market is in a little period of consolidation.  Today looks to be much of the same although there’s some more US data that might excite.  At 13h30 CPI numbers are expected to show a mild rise, mainly down to energy prices that have been creeping back up.  After that industrial production and then probably the highlight of the afternoon is University of Michigan confidence, which is due to edge higher, however yesterday’s poor retail sales could lead to a bit of downward pressure.

Trichet’s comments didn’t do much to ally concerns over Greece’s fiscal problems and the “PIGS” (as they’re so graciously referred to) are still causing Europe’s single currency a serious headache.  It would seem that financial institutions will be afforded a helping hand from central banks, but countries or governments will not.  It has only gone to confirm that Europe is running a two tier system and the lower tier could really undermine the both of them together.

On top of this the economic data has hardly been inspiring and indicative of a eurozone that’s recovering at pace.  German GDP numbers confirmed that on Wednesday.

Sterling strength continued yesterday as cable overcame the 1.6300 level soon after the ECB rate decision.  As expected, nothing exciting was announced from the ECB and the general message just confirmed that rates in Europe will remain at 1% probably throughout 2010.  Weakness set in for the euro and pretty much continued for the rest of the day and this morning the bears are really punishing the single currency.  This morning cable is at 1.6305 and EUR/USD is at 1.4392.

The US retail sales didn’t help the dollar much and it drifted back to the $91.00 mark against the yen.  With the rate at 90.92 this morning support is seen around 90.70 and then 90.40.  A little down trend has formed since 7th January so dollar bears are just back in the ascendancy for now.

Crude prices continue to remain under pressure with their fourth decline in a row.  As long as the inventories continue to build and the weather in the northern hemisphere gets warmers oils gains will remain limited for now.