Business leaders meet for a bit of skiing and discussion in Switzerland today as the annual World Economic Forum in Davos gets under way. 

It’s likely that there’ll be a lot less hot air produced from the discussions in the highest City in Europe than there is likely to be at the next EU summit at the end of the month, but the realisation that it’s not they who hold the key to the end of the world wide debt crisis, rather it’s the politicians.  Unfortunately, if history over the past few years is anything to go by, we can’t hold out much faith in our politician’s ability to be able to solve the crisis and so a great deal that will be discussed over the next week is likely to fall on deaf ears.

Growth remains one of the big issues of the day. There are at least efforts to a degree by many European countries to reduce their debt burdens, but they will only get to where they want by stimulating growth and creating jobs.  In the UK the first reading of Q4 GDP numbers are not going to be pretty and are expected to show a retraction in the economy at the end of 2011, the first part of a possible technical recession if we see Q1 of this year also retract.  Consumer confidence remains downbeat and jobs continue to be cut back in both the private and public sector and this time round our George won’t be able to blame the weather for the GDP decline.

The only problem with trying to stimulate growth at this time in the economic cycle is that it will almost certainly require money in the short term, money which governments can’t afford at the moment.  Other ideas are needed such as cutting red tape for employers (something we spoke about yesterday).  The big question is whether the UK will avoid a technical recession and the answer at the moment is that two quarters of negative growth are not expected at the moment.  We managed to avoid this a year ago and looking at the PMI surveys both the manufacturing and services sectors remain in the expansion zone.

There’s lots of economic data out today with the German Ifo business survey before we get the UK GDP numbers and these are expected to highlight that Europe’s biggest economy is still in good shape and their businesses are hiring people as their export market remains strong.

Later on today the US bowls in with pending home sales and then the new format to the FOMC rate meetings takes place.  The decisions are being brought forward to earlier in the day to 15h30 London time, and then the statement from Bernanke follows at the usual time of 19h15.  We are supposed to see more transparency as to what the outlook is for growth, inflation and interest rates so it will be interesting to see just how much Bernanke is willing to give away.  The last meeting was rather downbeat about the economy, so there’s a chance that he’ll mention interest rates are due to remain low beyond mid-2013 and into 2014.

So in the build up to lots of economic data ahead the FTSE has opened just a few points in the black after a half decent session in Asian markets overnight.  The index found support around the 5720 level yesterday, its previous resistance area proving to many technical analysts that the old support and resistance theory can work.  The index is at 5770 at the time of writing and whilst yesterday showed momentum for the bulls were just taking a breather, this morning some tentative buyers are creeping back in.

The euro dipped back below the 1.3000 level against the greenback yesterday as a bit of risk was taken off the table across all markets, but the Asian session has given the single currency a little boost this morning as EUR/USD has got itself back above the level standing at 1.3030 at the time of writing.  Support and resistance is seen at 1.2970/1.2900 and 1.3050/1.3100 respectively over the near term.

Gold had a go at the 1680 level yesterday and continues with its upward trend having bounced its way off support areas during its recent little run higher.  Clients remain bullish of the precious metal and will be hoping at some point of a return to the dizzy heights recorded last year around 1900.