The past week had the potential to be explosive. Central bank meetings in the UK and Europe had traders licking their lips with anticipation for the possible outcomes of the meetings and the potential volatility they could bring.

Sadly for volatility lovers, the week came and went with little significant turbulence. The FTSE ended the week up almost 150 points. The Dow Jones Industrial Average was not so lucky, losing more than 250 points; most of it on Friday afternoon, when the world largest insurance company AIG announced it will be seeking more then 12 billion dollars in new capital. The new week brings with it a slew of data from UK and Europe; the common theme being inflation.

From Consumer Price Index to Producers Price Index, traders will be looking for a number that’s on the higher side of expectations, as oil prices are at an all time high and largely to blame for the inflation run. As it was mentioned last week in the EU bank speech that accompanied the rate decision, the main reason why the decision was taken not to lower interest rates, was the great concern that doing so would cause inflation to spiral out of control. On the US side, the data will focus more on retail sales and the health of the manufacturing industry. Last week, Wal-Mart and a few other big box retailers announced that their ’same store’ sales were higher, possibly indicating that consumers are shopping more. If this is the case then perhaps this could be the stimulus that the US president was talking about, or maybe it could be explained by consumers hitting the shops to spend their tax refunds.

For Information on Asset Management contact Nigel Walter