August 9th, 2010 08:19:06 GMT

One of those days when patience must reign…


I recall Gerry commented on a couple of days last week when there was little going on.

Cable has succumbed to the inevitable witha few speccy longs being stopped below 1.5950 with little happening elsewhere; usd/jpy and eur/jpy remain in the upper ranges for the day but there is little to get excited about yet…

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August 9th, 2010 07:24:21 GMT

Gloomy outlook expected from Bank of England


Mervyn King aka Merve the Swerve will be speaking over the next couple of days and The Bank of England is expected to give a gloomy assessment of Britain’s short-term prospects this week, forecasting weak growth and high inflation

This has been the case viewpoint-wise for a while and while they are quite correct the market was heavily positioned short and we have seen sterling recover dramatically; I stand by my view that we may see further gains before the market renews it’s negative view and momentum.

If we can get through the 1.60/1.61 I believe we will quickly target 1.65; I am also a buyer of dips in GBP/AUD towards 1.71 looking for a retest of 1.82 – usual problem is it is expensive being short AUD


August 9th, 2010 06:45:33 GMT

Analysis: BoF Survey Signals Slower Activity At Start Of 3Q


PARIS (MNI) – France’s economic recovery is likely to lose a little
momentum in 3Q, with only modest growth in industry, the Bank of France
said Monday, projecting GDP growth of 0.3% on the quarter.

Last month the central bank estimated 2Q growth at 0.4%, slightly
less than most analysts expect from the preliminary data to be released
this Friday. The national statistics institute Insee had forecast +0.5%
in June.

Buoyed by export demand, industry production no doubt remained
dynamic in 2Q, but company output prospects eroded markedly during the
quarter, suggesting a slowdown at the start of 3Q. The acceleration of
imports points to a rebuild of inventories in 2Q, which could offset an
eventual drag from foreign trade.

The Bank of France’s survey from July signaled steady growth in all
industrial sectors except for non-auto transport equipment, where
activity was stable. The overall capacity utilization rate eased down
0.4 point from June to 76.4%, nearly six points below the long-term

Order books were assessed close to normal levels and finished goods
inventories were little changed, also at normal levels, the central bank
commented. “Forecasts point to slight growth in production levels in the
short term,” it said.

In line with most analysts’ forecasts, the bank’s sector climate
indictor, based of the latest three months’ results, stood at 101 in
July, but this was not the modest improvement expected, since June’s
level was revised up one-point to May’s 101, down two points from the
cyclical peak in March. The long-term average is 100.

In the services, activity picked up again in July, after a slowdown
in June, bolstered by growth in temporary employment — an early
indicator of an improvement in the labor market. However, the sector
climate index slipped one point to 96, apparently reflecting mainly
waning growth in overall demand in recent months.

“The outlook for activity indicates an upswing over the coming
months,” the bank said.

Other surveys also signal diverging trends in industry and the
services. Insee’s industry survey showed morale recovering somewhat in
July as orders improved, but company production expectations eroded
further. The factory PMI slipped another 0.9 point in July to 53.9, down
2.7 points from a peak in April, as output and orders slowed and
employment contracted faster.

By contrast, the services PMI recovered somewhat in July to a solid
61.1, despite further erosion in medium-term expectations. Insee’s
survey signaled a marked pick-up in recent activity. But here again,
expectations for activity and demand weakened further, leaving the
overall index still slightly below the long-term average.

The principle risk for the medium term is private consumption, the
traditional motor of French growth. Spending on manufactured goods has
been heading south since public incentives for new car purchases were
cut back in January, falling 1.9% in 1Q and another 0.9% in 2Q,
signaling another quarter of lackluster private consumption.

With wage gains at a decade low, unemployment high, and public
income supports being cut back, consumption could well remain anemic for
some time. Consumer sentiment has sunk to 13-month lows, undermined by
rising prices, financial concerns and job worries.

–Paris newsroom +331 4271 5540; e-mail:

[TOPICS: M$F$$$,M$X$$$,M$$EC$,MT$$$$,MGX$$$]

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August 9th, 2010 06:37:57 GMT

Bank Of France …..


  • Forecasts Q3 GDP Growth of + 0.3%
  • Industry Sentiment Index 101 in July vs Upwardly revised 101 in June
  • Services Sentiment Index 96 in July vs unrevised 97 in June
  • Outlook for activity indicates an upswing over the coming months


August 9th, 2010 06:35:24 GMT

Text Of The Bank Of France July Monthly Business Survey


PARIS (MNI) – The following is the text of the overview of the
Bank of France’s July monthly business survey:

The business sentiment indicator in industry* stood at 101 in July,
as in June.

The business sentiment indicator in services* stood at 96 in July,
after 97 in June.

According to the monthly index of business activity (MIBA), GDP is
expected to increase by 0.3% in the third quarter of 2010 (first

* Calculations are based on survey data smoothed over three


In July, industrial activity increased at a similar pace to the
previous month. All sectors improved; only “other transport equipment”,
excluding cars, remained stable.

The capacity utilisation rate remained almost unchanged and is
still below its long-term average.

Order books stayed at close to normal levels.

Inventories of final goods remained stable at normal levels.

Forecasts point to slight growth in production levels in the short

Activity in the services sector continued to increase, buoyed in
particular by growth in temporary work.

Prices barely changed. Staff levels continued to rise, but at a
slacker pace than in June.

The outlook for activity indicates an upswing over the coming

–Paris newsroom +331 42 71 55 40, e-mail

[TOPICS: M$F$$$,M$X$$$,M$$EC$,MT$$$$]

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August 9th, 2010 06:25:14 GMT

Japan July Watchers Index 49.8 Vs June 47.5, 1st Rise In 3 Mo


– Japan July Watchers’ Forward-Looking Index 46.6 Vs June 48.3
– Japan Watchers’ Outlook Index Down For 3rd Month In Row
– Japan Govt Repeats: Econ Climate Tough But Move For Pickup Seen

TOKYO (MNI) – The Economy Watchers’ Survey index for current
conditions in Japan rose to 49.8 in July from 47.5 in June, posting the
first rise in three months thanks to heat waves that boosted sales of
air conditioners and refrigerators, the Cabinet Office said on Monday.

While consumers took advantage of the government’s reward program
for buying greener electronics and subsidies for purchases of energy
efficient vehicles, the expiry of the auto subsidies in September (tax
credits will continue) and the recent rise in the yen raised concern
about car sales and overall exports in the coming months, it said.

In the previous two months, sentiment was dented by slower durable
goods spending following rush purchases of flat-screen TVs in March
before the government tightened rules on the reward program. In May, bad
weather conditions also dampened consumer spending, causing the headline
index to mark the first drop in six months.

In July, the level of the index recovered to 49.8 marked in April,
which was the highest since 50.8 in March 2007. Three years ago, the
Japanese economy was still in its longest post-war expansion period that
ended in October 2007.

Meanwhile, the headline index stood below the key 50 level — the
dividing line between net positive and net negative responses to the
survey — for the 40th straight month in July.

The latest survey showed that “the economic climate is tough but
there are signs of an improvement,” the Cabinet Office said, repeating
its view adopted in its March report, when it upgraded is assessment for
the second straight month.

The survey was conducted between July 25 and July 31.

The 2.3-point rise in July was due to more people saying things
were getting “better” or “slightly better” and few people seeing
conditions as being either “worse” or “slightly worsen”. It followed a
0.2-point drop in June.

The 7.0-point slump in November 2009, which is believed to have
been caused by the government’s ill-timed announcement that Japan was
back in mild deflation, was the largest fall since the survey began in
August 2001.

The headline index hit a record low of 15.9 in December 2008 at the
height of the global financial crisis, but posted its first gain in 10
months in January 2009 as more people thought conditions were unchanged
after deteriorating drastically in previous months.

The index then rose for seven months in a row but bad weather
conditions and the pandemic of swine flu hurt sentiment in August 2009.
It fell in October and November last year on fears of a worsening
deflation after rising briefly in September.

In the latest month, the business index (manufacturers and
non-manufacturers serving other businesses) rose to 48.2 in July from
47.3 in June, up for the first time in three months.

This is because both orders and sales are picking up despite the
pressure to lower sales prices, the Cabinet Office said.

Meanwhile, the labor index fell to 55.5 in July from 56.3 in June,
posting the first drop in two months as companies in general remained
cautious about hiring regular workers, it said.

This index has shown ups and downs in recent months as the recovery
in wages and job creation is emerging only gradually, lagging the pickup
in production and exports.

The overall forward-looking index, which gauges conditions two to
three months ahead, fell to 46.6 in July from 48.3 in June, down for the
third straight month.

The outlook index was pushed down by fears that the expiry of the
subsidies for buying ecologically friendly vehicles will hurt
production, sales and employment in the car industry as well as concern
that the appreciation of the yen will undermine Japan’s export-led
recovery, said the Cabinet Office.

The index stayed below the key 50 level for 38 months in a row.

In January 2009 the index rebounded to 22.1 from a record low of
17.6 hit in December 2008.

The survey outcome is monitored closely by the Bank of Japan as it
appears to reflect retail sector sentiment more accurately than some
other data.

The watchers’ index gauges whether respondents with jobs most
sensitive to economic conditions — taxi and truck drivers, department
store sales staff and restaurant and shop owners — believe economic
conditions have improved or worsened from three months before.
** Market News International Tokyo Newsroom: 81-3-5403-4833 **

[TOPICS: M$J$$$,M$A$$$,MAJDS$,MT$$$$]

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August 9th, 2010 06:17:55 GMT

Another approach to 1.6000 for cable in early Europe


and 1.5996 still the high; London will no doubt push it again in 45/50 minutes or so but the interest to protect the barrier seems strong so far

Don’t know who the seller is but if it’s aggressive the likely contender must be the Panda – if it goes then watch the stops above 1.6010


August 9th, 2010 06:01:40 GMT

German June Trade Balance Seas Adj Eur 12.3bn


  • Eur 12.4bn was expected vs Eur 10.6bn in May ( Reuters concensus was 12.5)
  • June seas adj exports + 3.8% M/M; Seas adj imports +1.9%
  • June seas unadjusted exports +28.5 % Y/Y; seas unadjusted imports +  31.7 %
  • June Current Acc Surplus Eur 12.9bn vs revised Eur 1.8bn in May


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