- Business Secretary Vince Cable: Reasonable consensus that Q4 was a “pretty bad quarter” for UK economy. Cable came out with this comment well before the release of truly horrible growth data. Guess he was trying to prepare us for something real grotty
- UK Q4 GDP -0.5% q/q (yes, that’s a MINUS), way worse than median forecast +0.5%
- PSNCR 25.507 bln in December, much worse than median forecast 16.3 bln. PSNB 15.305 bln, better than median forecast 18.1 bln
- UK Chancellor Osborne: Would be huge mistake to change budget plans on basis of GDP figures
- IMF revises up 2011 global growth forecast to 4.4% vs October projection of 4.2%
- EFSF launches debut euro denominated 5.5 year bond
- German Gfk February consumer sentiment indicator 5.7, up from revised 5.5 in January, stronger than median forecast of 5.4
- BOJ’s Shirakawa: Japan economy may emerge from slowdown in first quarter
Sterling weakness is the story of this morning’s session. Cable down at 1.5780 from early 1.6000, having been as low as 1.5753 at one stage. EUR/GBP is up at .8635 from early .8535. The market was already cautious about the Q4 GDP data. Vince Cable’s remark (see above) only served to heighten that caution.
Stops just below 1.5900 were tripped just ahead of the 09:30 GMT release and it was all down hill from there. Reserve bank of India bought just below 1.5800, but it did nothing to push back the tide. Medium-term model funds seen good sellers in wake of the terrible data.
EUR/USD sits at 1.3625, down from early 1.3660. Inbetween it’s been a crazy helter-skelter ride. We rallied early helped by Middle Eastern sovereign buying. Sell orders were well-touted at 1.3680/00 ahead of decent sized barrier option interest at 1.3700.
We topped out at 1.3687, Asian sovereign seller noted around the highs. US investment bank (not the one doing God’s work), BIS, hedge funds, Big German some of the names mentioned as notable sellers on way down.
Stops tripped through 1.3625 and 1.3600 accelerated the sell-of and we got as low as 1.3573 before recovery. Buy orders, including sovereign interest, were well documented at 1.3550/70 and that helped stop the rot.
Sell stops seen through 1.3540. Buy stops seen through 1.3720.
USD/JPY little changed at 82.45. Buy orders 82.00/20. Sell stops seen through 82.00 and 81.85. Sell orders seen up around 83.00. Buy stops through 83.15.
