Wednesday 16th January

Some big moves yesterday as stock markets around the world fell sharply on further credit crunch fears in the US. The Yen rose to a 2-1/2 year high against the dollar and a record low against the Swiss franc whilst later in the day the Euro and sterling gave up gains as dealers and traders were happy to take profits amidst the latest financial turmoil. Unfortunately this rush to risk aversion has hit our high yielders hard despite an almost certain hike in interest rates by the RBA next month.

Data yesterday showed US December retail sales were at their lowest since 2002 and further fuelled market rumours that the Fed was about to hold an emergency meeting to cut rates immediately (since denied).

Market focus today will once again be on US bank earnings and a host of potentially significant US economic releases. Difficult out there but we must exercise money management!