Commodity prices moved up sharply overnight with oil above $US144 a barrel, copper hitting a record price of $US4.06 a pound in New York, gold, wheat, corn and other metals firmer.
A few hours after the ECB decision we'll get the US labour force figures and unemployment rate for June. 60,000 jobs are forecast to have been lost, if the actual figure is well above that, US shares will wobble ahead of the Independence Day long weekend.
European inflation is rising, activity is contracting, but of the major economies, the UK economy seems to be rushing towards a nasty slump.
Housing prices are falling faster than previously thought, earnings are under pressure, retailing is hurting and now British manufacturing is being crushed. Consumer confidence is naturally low (27 year low by some measures). Figures released overnight show that the UK manufacturing sector contracted in June at the sharpest pace since 2001.
According to Nationwide Building Society, house prices fell for an eighth straight month, while other figures showed British shoppers are cutting back on trips to out-of-town retail centres because of rising petrol prices. They are doing more of their shopping closer to home on the so-called 'high streets' of Britain, or on the internet.
A forecast from the International Energy Agency of lower supply for the next five years and a tighter supply/demand balance wasn't good news for the UK where oil production from its North sea fields is slumping.
UK housing prices are now falling at the fastest rate in 16 years, with the average property having lost £14,000 (nearly $A30,000) of its value since prices peaked in October last year.
UK commentators said that for the first time in the 17-year history of the Nationwide monthly index, house prices have fallen month on month for eight straight months and even in the crash of the early 1990s, prices never fell with such sureness.
It's being matched by the slump in home loan mortgages granted by UK banks: May figures were down 64% from a year earlier and 28% from April. And there has been no word from the National Australia Bank about how its UK banking business is travelling.)
Average house prices, which started falling year on year in April, are now 7.3% down from their October peak and 6.3% lower than a year ago, and still falling. Much like the fall in the US as illustrated by the Case/Schiller Home Price Index which has tumbled 15% from April 2007 to April 2008.
UK retailer, Marks and Spencer (Marks and Sparks) stunned the UK markets overnight with an unexpected trading statement revealing a sudden 5.3% fall in UK like-for-like sales, (same store, or comparable store sales, as some retailers here describe them.
Its sales through outlets open more than 12 months) which will produce an expectation the retailer will report a lower first half profit. Builder Taylor Wimpey's rescue package failed, leaving it exposed The M&S figure covers the first quarter of the trading year to June 28.
M&S executive chairman Sir Peter Rose, was quoted as saying that "consumer confidence levels have deteriorated markedly and market conditions become more challenging" since the group reported full year results in May.
He wants shareholders to vote to make him executive chairman at the AGM next week. The latest news has seen calls for his removal. The retailer said that its UK sales of general merchandise fell 6.2% (on a like for like basis), while food sales were down 4.5%.
International sales jumped 24.5% and new store openings lifted group sales by 1.3%. But the overall news was gloom, gloom, gloom, with the company reporting that the head of its food business was leaving. The shares plunged 23.6% and dragged down the entire sector.
This is bad news and means other leading UK retailers such as Waitrose, Asda, Tesco, Debenhams and Kingfisher, will be under pressure to update their current trading conditions.
The surprise statement from the Chartered Institute of Purchasing and Supply group that UK manufacturing activity has fallen to the lowest level since the aftermath of the attacks in September 2001, took UK markets by complete surprise.
It was headline news and economists described it as a "dreadful report". The survey showed the purchasing manager's index dropped to 45.5 points last month - well below the 50 points that separates expansion from contraction. The May reading was also revised down to 49.5.
Economists say that unlike the US where exports have surged with the lower value of the greenback, UK exports have not responded to the falling value for the pound. The survey showed exports dropped again last month.
More worrying for some analysts was the surge in cost pressures for manufacturing in Britain: like a similar survey in the US on Tuesday (which showed cost pressures at a 29 year high) the survey showed that price pressures remain extremely high, with the input price index up to 82.1 and output prices up to 62.9 - both the highest levels since the series started a decade ago.
But the two big concerns remain the UK housing and retailing sectors. According to a report out overnight, UK consumers are cutting back on travelling by car to out of town shopping centres, which have become the mainstay of UK retailing in the past 20 years.
The reduction in visits to out-of-town centres is having a significant impact on retail sales, according to an information and credit services company called Experian.
Experian said its monthly footfall index showed shopper numbers fell 2.6% in June from the same month last year, and were down 5.8% to out-of-town destinations. UK internet traffic to retail websites, in contrast, was up 6.5% on the year. Experian said there was a 25% jump to 282 in the number of UK non-food retail bankruptcies in the three months to May.
That's a sobering backdrop for the news that Westfield has confirmed plans to start work on a shopping centre near the London Olympic Games Village (which Lend Lease can't find the money for).
Westfield said in a statement it had received the go-ahead to begin building a 1.5 billion-pound ($3.1 billion) retail development next to the planned 2012 Olympic Park.
The company said it had reached agreements on utilities and development rights with agencies including the Olympic Delivery Authority, allowing construction to start immediately on the 171,000 square-metre project called Stratford City.
The shopping center, which will have John Lewis and Marks & Spencer as anchor stores, will be London's largest when completed in 2011. Westfield has a 1.6 million square-foot retail development in the west London district of White City that's scheduled to open in October.
Westfield will say its building for the future, economists say its recession now, like more and more of Europe and the future can take care of itself.
