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Merkel expresses 'full trust' in Spanish government

Spanish President Mariano Rajoy and German Chancellor Angela Merkel held a joint press conference on Monday in Berlin, during which the Chancellor assured she had not lost confidence in the governing People’s Party, which currently faces corruption allegations.

“We have a relation of full trust in the Spanish government... I have the impression that the whole Spanish government is working to drive down unemployment, to push through structural reforms,” the Chancellor said.

Mariano Rajoy assured that his government is stable and that the People’s Party might take legal action against those who leaked documents which allegedly prove that the party received undeclared money.

Later the Spanish president went on to describe the reforms already implemented in order to halt the debt crisis and said that new measures, aimed at boosting growth, will be announced shortly. Angela Merkel expressed confidence that the reforms will soon “bear fruit” and promised cooperation on bringing down youth unemployment in Spain by facilitating internships and apprenticeships in Germany for young Spaniards.

Forex Flash: AU housing market highlights interesting trends – RBS

According to Greg Gibbs, An FX Trading Strategist at RBS, “The waning of the AUD this morning after a weaker than expected building approvals data suggests that the tentative signs of recovery in housing highlighted by the RBA remain just that – tentative.”
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Forex Flash: Risks puts GBP crosses under pressure – UBS

It appears the market is getting more nervous about holding short GBP positions heading into incoming Governor Mark Carney's Treasury Select Committee Testimony on February 7th. Led by asset managers' and hedge funds' selling in EUR/GBP, the pound was the best performer last week in G10 on a flow basis.
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