- UKQ4 GBP -0.3% M/M From Q3 unchanged at +0.9%. Expectations were originally for -0.1/-0.2% at the beginning of the week. Unchanged on the y/y (Reuters calling for +0.2%)
- German January IFO Business Climate Indicator 104.2 From 102.4 in December and above expectations of 103.00
- IFO Economist Wohlrabe: Sees Quarterly Economic Growth Of 0.2% In Q1, Recession Looking Unlikely
- ECB’s Draghi: 2012 was interesting ‘ to say the least’
- More Draghi: Eurozone deposit guarantee still ‘some way out’
- Bk of Italy Governor: Monti Paschi is under investigation
- Italy’s PM Monti: Risk that a strong euro could harm exports
- EU’s Reding: UKwill lose a lot if it leaves the EU
- China’s XI: China’s position over the Diaoyu island is clear and consistent
- Britain must commit to building an economic future with China – UK Telegraph
- Rifts Over Cyprus Bailout Feed Broader Fears..
Well we all knew it wouldn’t be a quiet session, (that’s why Gerry took the day off!). The lull in Asia was rudely broken on Europe’s arrival with the EUR/USD around 1.3360 when I sat down and proceeded to head higher pretty much immediately along with EUR/GBP on anticipation of a strong IFO reading for Germany. Barriers were taken out at 1.3400 ahead of a confirmed stronger German IFO and the move continued after UK Q4 GDP came in weak (somewhat expected) prompting more EUR/GBP buying and flushing another barrier at 1.3450 (high 1.3452) before some profit taking set in. Buy stops now sit on a break of 1.3460
EUR/GBP took out 0.8500 (because Gerry said it would) and looks intent on taking the next one at 0.8550 (high so far 0.8537)
A similar story in EUR/JPY with barriers at 121.50 and 122.00 breached to highs of 122.19. USD/JPY was also driven by the EUR/JPY rally taking out the much talked about top leg of a DNT at 90.75 to 90.92 before running into reportedly huge offers ahead of a 91.00 barrier; another large barrier sits behind at 91.50.
Cable was wobbly from the off but initial support held at 1.5760 and short covering ahead of the GDP release resulted in a move back up through 1.5800 to 1.5824 (Reuters), but the release confirmed suspicions and led a sharp sell-off to lows of 1.5745 before settling in the 1.5760/70 zone. A potential bounce led by a German name was held back in the low 1.5780’s by a rampant EUR/GBP (US Investment house apparently seen buying in the EUR/GBP mix)
AUD/USD was largely left alone in a 1.0447-69 range as EUR/AUD took off to pastures new, breaking through last Octobers highs (1 .2824) to 1.2868
European bourses were in the black with the DAX leading the field up over 1% and the FTSE trailing badly at around +0.1%
