• EUR/USD sell orders 1.3625/30; 1.3650 (options-related)
• GBP/USD sell stops at 1.4870 and again at 1.4840/50; Buy stops at 1.5030/50 from short-term momentum funds
• AUD/USD: Small buy stop 0.9175/80
• EUR/CHF downside options protection being bought in case SNB steps away
• UK clearing bank heavy GBP seller earlier in day; same name that bought 1.44 puts on Monday

• 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.

USD/JPY is up at 90.30, firmer from early .90.00.  Buy orders seen at 89.80 down to 89.50. Sell orders up at 90.30/50, which are just about holding topside (session high 90.39) Stops tipped through 90.65.

German January trade surplus  came in at s.a 8.7 bln euros, down from 16.6 bln in December, and demonstrably weaker than median forecast of 16.0 bln.  The news hit the euro with EUR/USD falling to 1.3562 session low.  There is some wariness of sovereign buy interest down around 1.3550 and we’ve recovered to 1.3570 at writing.

• Intraday buyers again emerging around 1.3570/80
• Solid selling interest around 1.3620/25 with trailing stops building above 1.3630 and 1.3645
• Heavy stops also noted below 1.3520 (which is the first time that I’ve seen long-stops for a few weeks so perhaps the market is starting to get a little heavy and suffer from the dead-cat-bounce syndrome)

• S.Korea fx authorities buying dollars to curb won’s strength – traders
• Russia central bank shifts lower bondary of rouble band to 34.55 vs basket after buying $700 mln – traders. Shifts bondary second time during morning to 34.50
• French January trade balance -3.681 bln euros, slightly better than median forecast of -4.0 bln – customs office
• Swiss February CPI +0.1% m/m, +0.9% y/y, slightly weaker than median forecasts +0.2%, +1.0% respectively
• UAE FinMin: Expects Dubai debt issues to be resolved soon
• French EconMin Lagarde: Idea of European Monetary Fund is interesting, but not short-term priority. Still working on technical proposals on CDS market
• Fitch: UK sovereign credit profile has deteriorated.  UK needs stronger fiscal adjustment. Among larger AAA sovereigns, urgency greatest for UK, Spain and France
• Fitch: UK still within tolerance of AAA rating, but uncomfortable with fiscal adjustment path set out by UK authorities
• Fitch: Portugal’s gradual approach to fiscal consolidation to 2013 is a concern.  Short-term outlook for Greece probably OK, longer-term outlook more open to question. Possible to have a sovereign default in the euro zone
• Fitch: United States vulnerable to interest rate shocks
• UK January global trade balance -7.987 bln, worse than median forecast -7.0 bln, biggest shortfall since August 2008

Risk aversion has picked up this morning, European stocks lower, oil off over a buck and gold lower. Fitch’s various prognostications (see above) hardly helped matters.  USD and especially JPY the beneficiaries.  JPY also aided by ongoing reports of fiscal year end repatriation flows.

EUR/USD started around 1.3615. Dipped early, briefly below 1.3600 before bouncing with reports circulating that Russia and BIS had been notable buyers.  The recovery didn’t last long and sell orders tipped at 1.3640/50 never came into play.  We were soon back below 1.3600, downbeat comments from Fitch Rating (see above) pressuring the pairing.  We’ve been as low as 1.3562 so far, presently at 1.3570.

EUR/JPY is down at 121.75 from early 122.50.

Cable has had a bad day.  Started around 1.5010 and was under pressure fairly quickly. Poor RICS housing data out overnight, Times poll showing Labour and Conservatives running neck and neck in key marginal seats and Moody’s warning of possible downgrades to UK banks/lenders among factors weighing. 

The sell-off accelerated as comments from Fitch Rating hit the wires (see above) and as data came out showing UK’s trade picture worse than expected (see above) We’ve been as low as 1.4940 so far, talk of sovereign buying below 1.4950 lending some very tenuous support.  We’re presently at 1.4952.

USD/JPY has seen a more active morning, down at 89.80 from early 90.30 amid heightened risk aversion and ongoing reports of fiscal year end repatriation flows.  A US investment bank seen notable seller this morning.  We’ve been as low as 89.63 so far, just above tipped buy orders at 89.50/60.

European stocks are coming under accelerated selling pressure, helping pressure EUR/USD.  We’re presently posting session low 1.3580 as risk aversion picks up.  Oil off three quarters of a buck, gold near session low.

Earlier there was talk of sovereign buy interest from 1.3585 to 1.3570, including apparently China.  Lets see if they turn up as scripted.

Elsewhere cable down at 1.4960.  Earlier there was talk of sovereign bids down around 1.4950.

Seems like market against the sovereigns, just for a change.

EUR/USD back up at 1.3622 having dipped to session low 1.3597 earlier. Russia and BIS have both been seen buying.  Sell orders tipped up at 1.3640/50.

USD/JPY has come under pressure in early European trade, presently down at 89.95.  Reports yesterday of Japanese name sellers up at 90.50 proved on the mark. Much talk of fiscal year end repatriation flows going through.  Buy orders now noted down at 89.50/60.  They’ll probably be stops parked just south of there.

Sterling has weakened across the board during the Asian session, cable presently down at 1.5015 from a North American close Monday up around 1.5065 while EUR/GBP is up at .9068 from around .9045.

A special poll carried out for The Times newspaper shows Labour and the Conservatives running neck and neck in key marginal seats which will determine the general election, raising further the spectre of a hung parliament.

UK RICS house price balance for February came in at 17, demonstrably lower than the median forecast of 30 and the lowest reading since August 2009.  Looks like the strong house price rally seen in 2009 has hit the buffers.

Finally Moody’s has warned that wind down of UK banking bailout programmes could result in rating downgrades for some UK banks.

Not much of UK economic data front today:

09:30 GMT:  UK trade for January.  Visible -7000; Non EU -3350;  total -3000

Sovereign buy interest tipped down at 1.4950.

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