Important signals for the market from opposite sides of the ocean. The ECB left interest rates at 4%, whereas Ben Bernanke, president of the Fed, said he was ready to intervene aggressively to bolster up the economy by cutting US interest rates, which have been stable at 4.25%. Two opposing monetary policies then.

The European one is explained by fears of rising inflation. Jean-Claude Trichet has made it known that he is worried about the knock-on effects of the high-risk loan crisis, and could well commit himself to that position for at least six months.

The US policy, which most operators think will lead to a 25 if not a 50 basis point cut, is driven by preoccupation over slow growth. The variables susceptible to such monetary policy decisions are several and not all acting in the same direction. The differential between falling interest rates (perhaps verging on a turnaround) in the United States and Europe, should penalize the dollar, which manages to remain stable (albeit very close to historic lows, at least against the Euro).

This is probably because the admissions of the president of the Fed, who accepts the risk of a phase of marked contraction or perhaps even recession in the States and is preparing measures to forestall it, fuel the suspicion that demand for oil may be slackening. In fact, oil has now slipped back from the record prices it reached just recently. Bernanke has thus, indirectly, helped shore up the dollar on the money markets. However, the rising price of gold, which has reached a new record of nearly 900 dollars an ounce (silver too is at a 27 year record), despite the relative stability of the dollar suggests that markets fear it may now be too late, whatever the Fed does, to prevent recession and with it, perhaps, an increase in retail prices.

The markets seem to be having trouble in summing up the various factors involved in the manoeuvrings of the central banks and in deciding whether stock markets are more likely to move up or down.