Monday 12th May

The US dollar finished last week under pressure as further weak economic data and continuing sub-prime fallout rattled investor confidence. But overnight the dollar has climbed back towards a 2 month high against a basket of currencies as weak economic data in Australia an New Zealand shows continuing signs of global slowdown. Business confidence in Australia recorded its lowest reading since September 2001 whilst house price gains in New Zealand slowed for an eighth straight month.

But last week showed us that the ECB continues to make 'inflation fighting' its first priority and Trichet's comments on Thursday were as hawkish as ever.

Oil prices look set to rise further and this will surely impact further on global economic growth and we detect some weakening in global stock markets after the recent impressive rises. Trend Reverse discipline please.