A day that was meant to be another occasion for the forex market to chew its collective fingernails over non- farm payrolls, is now just the end of a week dominated by politics.

The soap opera of US politics rolls on, and the world looks out from behind the sofa, desperately hoping that the story will end well, but after dire warnings about pending financial armageddon, has no further leverage to apply; Berlusconi has created –hopefully- his final piece of mischief making; in the UK we have come to the end of the party conference season, with some clear water starting to develop between the parties and in Germany talks begin about the formation of a coalition between the Christian and Social democrats.

It is this last, unloved point that I want to look at. After the goings on elsewhere, the German elections seem such a long time ago, and the formation of a new coalition is obviously a more leisurely pursuit than in the UK. It seems inevitable that the Social democrats rather than the Greens will be the eventual answer, and for the markets, that could be bad news. You may remember the spectre of the financial transaction tax, a tax to be levied on derivative transactions, well that is `a high priority` on the Social democrat agenda.

Don`t worry too much on a personal level, because spot will almost certainly be excluded when the detail is thrashed out, but if, as I expect, this topic starts to be more widely discussed, the agenda will move on to who has the most to lose/gain. The UK obviously has most to lose on this and has a formal opinion on its side that the tax is beyond the tax powers of the EU and is illegal. Despite this, brace yourselves for the next round of sabre rattling because believe me, we have not heard the last of this tax, and a formal coalition in Germany to include the SDP would put this back on the agenda, and probably back in the headlines!