Cable is back at .9100 having earlier posted session high .9129.  Talk is a UK clearer has been a decent seller of the cross in recent trade.

Suffice it to say it’s not the UK clearer recently reported buying cable puts.

• Lot of questions open on possible fund, including who pays into it and how

The worst of Greece’s financial crisis is over and other European nations won’t follow in its path, says former European Commission President Romano Prodi.

Well, that’s OK then. Excellent.

• Greek report to EU says implementation of deficit plan ahead of schedule
• Spain’s Economy Minister: 2009 deficit could be lower than previous forecast of 11.4% of GDP
• ECB’s Gonzalez Paramo: Measures taken by Greece convince ECB, IMF, European Commission. Responsibility for Greece’s future lies with euro zone countries
• German January trade surplus s.a 8.7 bln euros vs 16.6 bln in December, much worse than median forecast 16.0 bln. Exports -6.3% m/m, imports +6.0% m/m
• French January industry output +1.6% m/m, much better than median forecast +0.2%
• SNB report to parliament:  Swiss GDP to grow by around 1% in 2010
• UK  PM Brown: UK recovery still in early stages and remains fragile. Believes Britian will maintain AAA credit rating
• Italy January industry output +2.6% m/m, much stronger than median forecast +0.6%
• UK January industrial output -0.4% m/m, much worse than median forecast +0.3%. Manufacturing output -0.9% m/m, much worse than median forecast +0.3% m/m. Both m/m falls biggest since August 2009
• Italy final Q4 GDP revised downward to -0.3% q/q, -3.0% y/y from previous -0.2%, -2.8% respectively – ISTAT

Euro has had an Ok morning after shaky start.  EUR/USD  is up at 1.3620 from an early 1.3595, receiving a late morning boost from news that Greece has told EU implementation of deficit plan is ahead of schedule.  EUR/JPY is up at 123.10 from early 122.40, while EUR/GBP is up at .9120 from early .9085.

It wasn’t all a bed of roses though.  EUR/USD initially came under pretty heavy pressure, the euro underminned by demonstrably weaker than expected German trade data (see above.) We got as low as 1.3546 before recovery, a major French bank having apparently backed up the truck and bought aggressively around the lows.  I’m sure they’ll be reports of sovereign buying down around lows but didn’t  hear them myself.

Cable started around 1.4965 and came under heavy pressure right from the get go.  Reports had a UK clearer and hedge funds selling aggressively. The clearer was said to have been the same one seen buying 6 month 1.4400 cable puts recently.

We got below 1.4900 buy strong buying emerged just ahead of technical support at 1.4880 (76.4% retracement of 1.4781/1.5197).  This lifted cable higher and reports of sovereign purchases helped cable get back to around 1.4950 just ahead of the 09:30 GMT release of truly horrible UK industrial/manufacturing output data. Cable swooned and eventually got as low as 1.4874. We’ve seen some recovery, presently back up at 1.4920.

Reports SNB intervened in EUR/CHF lifted the cross from 1.4612 session low. But there has been no followthrough (session high 1.4630) and we’re presently at 1.4620, effectively unchanged on the day.

USD/JPY sits up at 90.40 from early 90.05 amid speculation BOJ could ease monetary policy further at their March 16/17 meeting.  Stops tipped through 90.65.

Well that’s a little bit of good news and will be helping underpin EUR/USD.

Greek report to EU

• Says recent data suggest macroeconomic environment has deteriorated
• 2009 base year revision to contract GDP more than 0.3% forecast for 2010
• Little doubt that salary cuts, weaker economy to reduce consumption in 2010
• Stronger global economy suggests some improvement in Greece’s external balance
• No slippages yet on plans to cut spending. Revenue measures being implemented
• Persistence of high yields on government bonds may mean revisions to interest payment forecast

Elsewhere

• Spain’s Economy Minister says 2009 deficit could be lower than previous forecast of 11.4% of GDP

After buying at least $700 mln according to dealers.  Some of those dollars will no doubt turn into euros. 

EUR/USD has extended rally back to 1.3610 at writing.

USD/JPY been up to 90.50, presently at 90.45.

Reuters reports, that according to sources, the BOJ is leaning towards easing monetary policy again next week. But there is said to be disagreement among the seven policymakers on it’s board on how to justify such a move.

The BOJ meets March 16/17.

Cross up at 1.4629 from session low 1.4612.

• Revised to -0.3% q/q, -3.0% y/y from previous -0.2%, -2.8% respectively.

EUR/USD has recovered to 1.3585 from earlier 1.3546 session low.  Doesn’t appear Europe wants to test likelihood of sovereign buy interest at lower levels.

• Portuguese 5 year cds narrows to 110.3 bps from 118.3 bps

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