Should the market grow suddenly risk averse, interbank traders tell us that Japanese bids are down at the 83.50/55 level. We’ve been as low as 83.58 in recent sessions. Some chatter about a barrier at the 83.50 level was heard earlier in the week,

Far East and BIS buying EUR/USD on dips to 1.2775/80, offers at 1.2840/50. Stops are seen above the 1.2860 level.

Claims and factory orders up next. Claims are expected to rise 2,000 to 475,000.

Factory orders are expected to rise 0.3% after falling .3% last time.

• Sweden’s Riksbank raises key repo rate to 0.75% from 0.5%
• French Q2 ILO jobless rate falls to 9.7%, better than median forecast of 10%
• Japan’s Ozawa:  FX intervention just by Japan may not have much effect, but should be prepared to act
• Swiss Q2 real GDP +0.9% q/q, +3.4% y/y, better than median forecasts +0.8%, +2.7% respectively
• Nationwide UK August house prices -0.9% m/m, +3.9% y/y. Much weaker than median forecasts of -0.3%, +4.9% respectively
• UK construction PMI 52.1 in August, down from 54.1 in July.  Much weaker than median forecast of 53.2
• Euro zone Q2 GDP confirmed at +1.0% q/q.  Revised up to 1.9% y/y from previous 1.7%
• Swiss retail sales +4.8% y/y in July, better than median forecast of +2.3%
• Spanish/German 10 year government bond yield spread fall to 169 bps . Lowest since August 20

Not too much going on. Sterling has had a poor morning, underminned by poor house price, construction PMI data.  Swissy on the flip side has had good morning,  underpinned by good  Q2 GDP, retail sales data.

EUR/USD firmer on day, up at 1.2825 from early 1.2790.  The pairing did suffer a bit of a swoon posting a session low 1.2777, but ready buyers emerged.  The sell-off seemed to coincide with announcement of Swedish rate hike, which saw heavy selling of the EUR/SEK cross.

Asian central bank and hedge funds notable buyers below 1.2800 this morning.  On the topside sell orders noted at 1.2830/50 and they’ve helped cap rally attempts at 1.2838 so far.

Cable down at 1.5400 from early 1.5445.  Poor UK house price/construction PMI data have weighed on sterling.  Real money buyer seen around 1.5375 low helping lend much-needed support.

EUR/GBP up at .8325 from early .8280, but sell orders noted at .8330/50 have capped topside at .8338 so far.

EUR/CHF down at 1.2980 from early 1.3015 having been as low as 1.2945 at one stage.  Swissy supported by strong GDP/retail sales data.  UK clearer notable seller in very early trade.

USD/JPY unchanged at 84.18.  Got as low as 84.01 before decent buying from a Dutch bank lent much-needed support.  The Danish bank, who has been notable buyer of late, was also said to have been in buying again.

Had to step away to take phone call past 45 mnutues or so and guess not a heck of a lot has happened.  EUR/USD sits at 1.2820, sell orders up at 1.2830/50 still hanging tough.

USD/JPY managing to hold above 84.00 so far, presently at 84.19 having been as low as 84.01.  Heard Dutch bank (not Danish this time) seen decent buyer off the lows. 

Cable meanwhile managing to hold up after post construction PMI swoon.  EUR/GBP at .8323, aforementioned sell orders up at .8330/50 managing to cap earlier rally which topped out at .8338.

Nearly home time.

Presently at 8310 from early .8280.  Talk sell orders clustered up at .8330/50.

EUR/USD up at 1.2817. Talk Asian sovereign has been notable buyer in recent trade. Talk sell orders 1.2830/50. Probably stops through yesterdays 1.2855 high.

EUR/USD down slightly at 1.2790 from North American close Wednesday around 1.2810, with price action confined to conservative 1.2786-1.2813 range.

Euro zone data today:

05:30 GMT: French ILO mainland unemployment Q2 9.6%, unemployment rate 10.0%

08;00 GMT: Italian PPI for July expected +0.4% m/m, +4.3%

09:00 GMT: Euro zone Q2 GDP (prov) expectewd +1.0% q/q, +1.7% y/y

09:00 GMT: Euro zone PPI July expected +0.3% m/m, +4.0% y/y

11:45 GMT: ECB rate decision. Senn steady at 1.0% 

12:30 GMT: ECB press conference

Strong moves higher overnight in EUR/GBP, EUR/CHF and EUR/JPY have turned momentum in favour of the EUR, in the short term at least. Buying dips would seem to be the favoured strategy whilst this cross action is taking place.

Dealers report bids starting at 1.2750 through 1.2730 which should support at least during the Asian session. Mixed bag on the topside with stop-loss buyers and profit-taking sellers mixed together until we get close to 1.2900 when the sellers start to dominate.

Sovereign players have been very busy in the cable over the last week or so and more orders are being reported.

It’s unlikely that Asia will witness any big moves today but if cable does rally and stall at 1.5515, then you’ll know that the offers are decent in size.

• China’s passenger car sales rose 59.3% y/y in August, marked improvement from the 15.4% y/y rise seen in July
• Departing White House economist Romer:  US budget deficit cannot be excuse for leaving unemployed to suffer. US has tools that would bring unemployment rate down, must find will to use them
• Currency trading growth slowed amid crisis, BIS says
• German July retail sales -0.3% m/m, +0.8% y/y, weaker than median forecasts of +0.5%, +1.4% respectively
• Swiss PMI for August 61.4, demonstrably weaker than median forecast of 66.0
• Euro zone final manufacturing PMI for August 55.1, fractionally up from flash 55.0, but down from 56.7 in July and lowest read since February
• UK manufacturing PMI for August 54.3, demonstrably weaker than median forecast of 57.0. Lowest read since last November
• Spanish/German 10 year govt bond spread narrows to 177 bps from 186 bps at Tuesday settlement. Italian/German 10 year govt bond spread narrows to 158 bps from 165 bps at Tuesday settlement
• German FinMin: Sees little sign of higher interest rates in foreseeable future. Greece deserves respect for its efforts on budget consolidation

EUR/USD started around 1.2700 and made an orderly ascent in early trade. The overnight release of good Australian Q2 GDP  and Chinese August PMI data had set the tone.   The momentum increased as European stocks extended their gains, and stops through 1.2750 and 1.2780 were triggered on way to session high 1.2812.

Middle Eastern selling, probably including sovereign interest, has been noted above 1.2800. 

Cable at 1.5380 effectively unchanged on the day.  Early rally floundered after running into well noted sell orders up at 1.5415/25.  The release of demonstrably weaker UK manufacturing PMI has served to inhibit cable gains, despite the generally better risk sentiment which would usually lift the pairing. 

EUR/GBP UP AT .8316 from early .8255, with major Swiss commercial bank notable buyer of the cross after the weak PMI data.

EUR/CHF up at 1.2972 from early 1.2900, underpinned by the better risk sentiment, swissy losing a little of it’s safe haven premium. 

USD/JPY down at 84.00 from early 84.35, garnering absolutely no support from the better risk environment.  A touch worrying. Well not if you’re short I guess. 

AUD/USD up at .9055 from early .8975, underpinned by better risk sentiment.  Stops tripped through .9040 on way to .9061 session high.  More stops noted through .9080.

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