• BOE MPC: Voted 9-0 in favour of the £75 billion QE
  • BOE’s Posen: Inflation spike is very temporary-Sees inflation falling fast in the first half of 2012, BOE still has”ammo” to support the economy
  • EU Officials say no agreement has yet been reached to scale up the EFSF
  • French Pres Sarkozy: Europe is at a“crucial moment”
  • German Chamber of commerce survey (DIHK) cuts 2011 GDP forecast to +3% from +3.5%, sees 2012 GDP at 1%
  • German DIHK: Companies effected by Basel III financing could face worse effects if banks restrict lending
  • EU August construction output +0.2%m/m, +2.5% y/y.July revised up to +1.8%m/m from +1.4%
  • Austrian Fin Min Fekter: Greece bondholders must contribute more
  • Fed’s Plosser sees inflation danger ahead from bond purchases
  • Berlusconi to appoint a new Bank of Italy governor on Thursday to replace Mario Draghi
  • S.Korean FinMin: See significant global economic uncertainties – Dow Jones
  • US weekly MBA Market index -14.9% at 633.10 vs 744.3 last week
  • Greek Fin Min Venizelos: Expects debt solution on Oct 23 summit

A strong rally this morning in the EUR/USD with Europe continuing the recovery from NY’s late fall on the back of a Spanish downgrade. Asian sovereign buying and the Japan/Korea swap agreement prompted the move higher through 1.3800. BIS slowed the ascent around 1.3820 before a panic buying spree in EUR/CHF took out the semi-official interest assisted by Middle Eastern buying. Stops were then taken out through 1.3850/60 to 1.3867

GBP/USD largely tracked the EUR/USD but the MPC minutes showing unanimous support for the QE program sent cable back down to 1.5712 from 1.5735 before Asian sovereign buys took cable through earlier highs of 1.5778 to 1.5818.

EUR/GBP jumped on the MPC minutes to the 100 day MA at 0.8788 before later backing off to 0.8757

USD/JPY did what it does best.( nothing) in a 76.71-85 range with all action seen in the EUR/JPY in a steady climb to 106.47 from 105.80

AUD/USD traded up to 1.0353 from 1.0280. Eastern european names were seen on the bid at 1.0280 with sovereign names steady buyers on the morning . Offers are sitting up at 1.0370/75 and 1.0380/85

EUR/CHF saw panic buying amid rumours of a hike in the 1.20 peg set by the SNB. , with a UK clearer in the mix buying on behalf of a Hedge fund. A sharp spike from 1.2380 topped at 1.2465 before backing off to 1.2420

European bourses were up around 1-1.5% ( STOXX up 1.3%, FTSE 1.1%, CAC 1% and the DAX 1.2%)