ForexLive European Morning Wrap; Messy Monday Morning

• PIMCO’s El-Erian says prefers German government bonds over U.S. treasuries
• Swiss January unadj jobless rate 4.5% vs median forecast 4.6%.  Seasonally adjusted 4.1% vs median forecast 4.3%
• Bk of France January survey sees Q1 GDP at +0.5%.  Industry business sentiment index 104 vs revised 102 in December. Services business sentiment index 89 from 88
• Swiss retail sales 4.75 y/y in December
• Euro zone sentix index -8.2 in February vs -3.7 in January, worse than median forecast-2.3 and lowest read since last October
• China aims to keep inflation at about 3% this year. China may raise rates to fight asset bubble, control inflation – National Pension Chief

Messy Monday morning.

EUR/USD started around 1.3640 and has been up as high as 1.3713, presently at 1.3685.  I’d characterise this morning’s trade as highly nervy.  The picture regarding likes of Greece, Portugal and Spain remains pretty dire, but there is some evident caution at these lower levels. The market probably has one eye on the meeting of EU leaders this coming Thursday and the outside chance they may just pull a rabbit out of the hat.

Russia was a decent buyer, helping give the pairing it’s early upside impetus.

Cable has been all over the shop. Started around 1.5595 and fell sharply early, triggering stops through 1.5550 and reaching session low 1.5536. From  there we saw a murderous short squeeze, the pair rallying quickly to session high 1.5625. 

There was talk of an ACB seller lying in wait up at 1.5630/40, but we never got there.  UK clearer stepped in beforehand selling decent amounts and we’re presently down at 1.5580. 

USD/JPY SIT AT 89.40, unchanged on the day after narrow rangebound trade.