• EFSF’s Regling: No current need to expand EFSF fund – Radio interview
  • German Wiseman Bofinger: Calls for EU to create “marshall plan” for debt-ridden euro zone countries
  • Greek Development Minister: Greek economy will show signs of growth in Q3 2011
  • German Dep FinMin: Greek debt restructuring talk is a fantasy based on rumuors, not on facts
  • EU Commission: It is confident that Greece will be able to refinance itself after 2013
  • Finance expert for Merkel’s Conservatives: German Bundestag would not currently approve EFSF rescue fund buying sovereign bonds
  • North Korea proposes high level military talks with South Korea. South accepts proposal – Yonhap
  • ECB’s Bini Smaghi: Core inflation could lead to underestimating of general price pressures. Monetary policies focused on short-term objectives risk favouring excessive wait-and-see stance
  • ECB’s Liikanen: Sees “no imminent price pressures in Europe”
  • German December producer prices +0.7% m/m, +5.3% y/y, stronger than median forecasts of +0.5%, +4.9% respectively
  • Swiss ZEW investor sentiment -18.4 in January, down from -12.5 in December
  • UK CBI manufacturing order book balance -16 in January, down from -3 in December and weaker than median forecast of -2
  • China inflation, growth forecasts for 2011 raised by Deutsche Bank – Bloomberg
  • German FinMin Bruederle: Germany opposes eurobonds

Fairly busy morning. Bit of everything to keep people entertained. BIS been busy, selling dollars versus euro, sterling and swissy. Decent unwinding of positions in scandi crosses.

EUR/USD up at 1.3495 from early 1.3455. Choppy start. Early selling (UK clearer and Danish bank notable) extended to 1.3419 before recovery. BIS stepped in buying helping drive the recovery. More central bank buying extended rally as periphery bond spreads saw some improvement.

Covering of EUR/scandi shorts this morning also helped underpin EUR/USD, US investment bank to the fore. Talk of EUR/NOK buying lined up for the 13:15 GMT ECB fix.

Stops seen through 1.3525 in EUR/USD before barrier option interest at 1.3550.

Cable up at 1.5985 from early 1.5935. BIS came in buying, giving the pairing a nice lift. Also decent buying of GBP/scandi crosses seen. Cable still struggling to hold ground above 1.6000 though, this morning’s rally topping out at 1.6009. Talk of stops gathered just above 1.6010.

USD/CHF down at .9540 from early .9560, BIS notable seller of the pairing this morning.

USD/JPY sits at 82.25, touch firmer in quiet trade.

AUD/USD little changed at .9945, recovering from early sell-off which saw session low .9927 posted. Talk of corporate buy orders around .9910, stops below 9900.