See Sean’s Picture in the paper?

Busy weekend Down Under for Sean. He got his picture in the newspaper.

Order central- Monday

• Solid sell orders at 89.50 in USD/JPY and every 5-10 pips above from Japanese accounts. Solid bids 88.60 down to 88.20. Stops below 88.50.
• AUD/USD stops below 0.8920; buy orders 0.8900. Sell orders 0.8990 through 0.9020. Stops lie up at 0.9070 thru 0.9100.
• EUR/US bids 1.3480/90

US personal income up 0.1%, spending up 0.5%

Not good for the savings rate, but good in terms of consumer spending.

The core personal consumption expenditure price index (the Fed’s favorite inflation measure) held steady at 1.4% in January.

The US savings rate fell to 3.3% in January, the lowest since the Lehman bankruptcy. Perhaps this is a sign that the US consumer is on the way back…

Relatively minor data like this will not move the dollar today as there are much bigger fish to be fried by the market (like the pound!).

Put gun to Buffett’s head and he would by Swiss francs

He doesn’t like currencies in general, but if he had to buy one he’d buy the Swiss franc. He says he’s had no currency positions for several years.

The Oracle has had far worse luck in commodities, currencies and bonds than he has had in stocks, over the years.

Oh my…

So much for sleepy Mondays…

Cable is leading the currency spiral this morning as the Prudential PLC deal to buy AIG’s Asian business for $25 bln in cash and over $10 bln in stock helped tip the scales against the pound. Throw in growing fears of a hung Parliament and the growing dent problem and you have yourself a rout.

Stops have been triggered as low as 1.4784 and now the pound is on the rebound with order boards as vacant as downtown Detroit. It trades now at 1.4915. Look for sellers toward 1.5000 near-term.

EUR/USD’s performance has been very unimpressive given the strong odds of at least a partial bailout of Greece this week. It would have been interesting to see if the market could have staged a recovery without the Cable collapse, but alas, we will never know.

1.3440/50 is the line in the sand for EUR/USD from a technical perspective. Barriers lie at 1.3425, 1.3400 and 1.3300, traders report.

ForexLive European Morning Wrap: Sterling crushed

• Prudential PLC agrees to buy AIA for $35.5 bln
• Spain’s Economy Minister: Euro zone will not just stand by if a member is in trouble
• Shanghai share index ends up 1.2%, highest close in 5 weeks
• Eurogroup’s Juncker: Would act against market speculation if it ignores Greek reform efforts -Handelsblatt
• EU’s Rehn: Had very fruitful exchange of views with Greek FinMin. Sure “ we can overcome” this formidable crisis together
• Greek PM: Greece fiscal crisis is only tip of the iceberg, has reached dramatic dimensions
• German govt spokeswoman: No new developments on issue of aid for Greece. Ball in Greece’s court. No aid to Greece to be factored into German 2010 budget
• Ukraine parliament to hold vote of no confidence in government of PM Tymoshenko on Wednesday
• Swiss February PMI 57.4, better than median forecast 56.0
• Euro zone final February manufacturing PMI 54.2, up fractionally from 54.1 flash, 30 month high
• UK February manufacturing PMI 56.6, unchanged from upwardly revised 56.6 in January which was strongest read in 15 years
• UK January mortgage approvals 48,198 vs 58,223 in December, well below median forecast of 50,000 and lowest since May 2009

Sterling weakness very much the main feature today. Cable is down at 1.4885 from early 1.5160, EUR/GBP up at .9087 from around .8975.  It was even worse at one stage, with session low 1.4784 seen in cable while EUR/GBP posted .9148 session high. 

Two factors were at play, firstly the announcement confirming Prudential had bought AIG’s Asia life insurance business (AIA) and the weekend poll indicating that we could well be headed for a hung parliament.  Early trading was quite choppy, an early sell-off folllowed by rally to 1.5180/85.  The die was caste though once the Pru announcement hit the wires.

Option barriers were well tipped at 1.5000 but they were easily brushed aside, tripping stops just below. More stops were hit on moves through 1.4940 and 1.4900 and then the coup de grace when 1.4854 (61.8% fibo retracement point 1.3500-1.7044) gave out.  We went from just above 1.4854 to session low 1.4784 and back again in what seemed like the blink of an eye. UK clearers have been active sellers of cable and buyers on EUR/GBP today.

EUR/USD started around 1.3610 and rallied early, aided in no small part by aggressive buying from a US investment house. The rally petered out around 1.3656 and the pairing was already slipping lower when comments from German spokeswoman (see above) helped push the pairing below 1.3600.

However the BIS stepped in buying around 1.3585/90 and looked to have stemmed the bleeding. That is until the collapse in cable which dragged EUR/USD down to 1.3511 before slight recovery to 1.3533 at writing.

USD/JPY touch firmer, at 89.30 from early 89.10.  Basically sidelined. Buy orders tipped 88.80 down to 88.20.  Sell orders 89.40/50. Stops just above.

Cable extends sell-off

Cable has been as low as 1.4944, presently at 1,4953.

Technical supports 1.4942 and 1.4900.

BIS seems to have stopped the bleeding in EUR/USD at least for now. We’re sitting at 1.3595. It sounds as though they’ve got something of an ongoing interest.

BIS turns up buying EUR/USD

Around 1.3590 by sounds of it.

Good old Barclays Capital

Well they didn’t have to wait long for those stops  through .9057 in EUR/GBP  to be tripped.  We’re up at .9075 having been as high as .9081.

Such is the pressure on sterling this morning, what with Pru/AIG deal being announced and concerns over hung parliament,  touted option barriers at 1.5000 were taken out rather easily.  The move through 1.5000 initially ellicited a small profit take, but it didn’t last long. We’ve been as low as 1.4964 so far, presently back up at 1.4975.

German government spokesman says no new developments on issue of aid for Greece

Well alrighty then.  Getting tired of this crap and it’s only Monday.

Comment won’t have helped EUR/USD which has slipped back to 1.3610 at writing.

• No aid to Greece to be factored into German 2010 budget