It’s Labour Day in Western Australia today.  The rest of the states take next Monday off.  So today started with washing the car and making a few changes in the garage.

Looking at the charts it is noticeable the the FTSE has not yet tested the November lows which have been broken by the US and German markets. It rises the question as to why.  We say the various markets are independent but usually they are joined at the hip with little discrepancy in their moves.  So why is the UK faring a bit better than the US and Europe? 

In my humble, non trained opinion it could be something like this.  The US is still going from bad to worse.  On Friday two more banks were taken over by the authorities, making 16 for the year so far (as against 25 for the whole of last year). Unemployment is still rising with all the attendant problems. 

In Europe it is a similar set of problems, and although no banks have been closed yet, they definitely have problems.  The EU is in effect a committee, and getting a committee to agree on one strategy to solve a problem is a big ask when they all have their own vested interestes.

The UK is not immune, house prices have fallen, unemployment is also rising with factory closings and business failings. Perhaps the UK banks did not go to quite the same lengths of selling mortgages to anybody who was breathing or the unexpected comparative positivity of the UK markets could be due to the fact that the UK kept its pound and didn’t go to the Euro. This has given them the capacity to devalue the UK currency in comparison with other currencies.

This week will be interesting.  Will the US fall further or will we have a bounce?  There are some market moving reports due out this week.  All eyes will be on the Non Farm payrolls out on Friday.