• Moody’s puts Spain’s AA1 rating on review for possible downgrade
  • Spain’s EconMin: Spain’s debt rating continues to show Spain’s solvency. Within 3 months Spain’s rating will turn positive (put that in your pipe and smoke it Moody’s)
  • UK November jobless claims -1.5K, weaker than median forecast -3k. ILO jobless +35,000 in 3 months to October. Rate 7.9%, higher than median forecast of 7.7%. Highest rate since February-April 2010
  • Merkel: Euro has proved itself to be resistant to crisis
  • UK CBI retail sales balance +56 in December vs +43 in November. Much better than median forecast of +35. Highest since April 2002. On flip side retail sales expectations balance +35 for January, lowest since July. Things effected by introduction of VAT increase in January

Busy morning again. Hasn’t anyone told the market Christmas is just round the corner. It’s getting silly.

Sterling weak, not helped by disappointing jobs report. Cable down at 1.5660 from early 1.5755. Stood around 1.5750 at time of jobs release and sold off quickly. UK clearer aggressive seller helping trip stops through 1.5710. We paused in the 1.5680’s, managing a brief bounce, but it was short-lived. Eventually stops were tripped just below 1.5680 triggering another leg lower.

EUR/GBP UP at .8525 from early .8470. Bundesbank was a notable buyer of the cross this morning.

EUR/USD marginally firmer at 1.3355 from early 1.3340. Initially though the pairing came under heavy pressure as Moody’s announced they were putting Spain on review for possible downgrade. We fell quickly through 1.3300. Talk had buy orders clustered around 1.3280 and 1.3285 proved the session low.

BIS, China, Big German and US investment bank who likes to do God’s work all buyers of the pairing around 1.3300 or lower. Infact the US investment bank has apparently put out a buy recommendation on the pairing, although we don’t have the details

USD/JPY effectively unchanged on morning, presently at 83.80. We did rally to session high 84.08, but BIS selling around the highs capped that. Sources also noted hedge fund sell orders waiting in the wings around 84.15, which wouldn’t have helped matters.