- ECB’s Trichet: We are calling for maximum flexibility, capacity for euro zone’s EFSF rescue fund
- ZEW December German economic sentiment index 4.3 vs 1.8 in November, slightly better than median forecast of 4.0
- German govt official: We will ensure the euro will remain stable in the long-term
- S&P: If Belgium fails to form new govt soon, a downgrade could occur, potentially within 6 months
- Swiss govt raises 2011 Swiss GDP forecast to 1.5% from previous forecast of 1.2%. Sees growth of 1.9% in 2012
- China ForMin: N.Korea agreed with China envoy on need to show “restraint”, promote “denuclearisation”
- French November EU harmonised CPI +0.1% m/m, +1.8% y/y, as expected
- Austrian ForMin: EU colleagues “concerned” about euro – Austria press agency
- UK Nov CPI +0.4% m/m, +3.3% y/y, marginally firmer than median forecasts +0.3%, +3.2% respectively. Highest y/y rate since May
Active morning.
Euro zone periphery worries have been largely put on the backburner for the time being. EUR/USD up at 1.3455 from early 1.3390, having been fleetingly as high as 1.3498.
Asian sovereigns bought early setting the tone for the day. Stops were tripped through 1.3440 and 1.3475 on way to 1.3498. S&P warning of a possible Belgium downground has slightly deflated the rally.
Cable effectively unchanged on day at 1.5860. Did manage an early rally which topped out at 1.5910. A UK clearer was a extremely aggressive seller of the GBP/AUD cross this morning and this weighed on cable and sterling in general. The GBP/AUD cross is down at 1.5845 from an early 1.5940.
USD/JPY down at 82.95 from early 83.45 having been as low as 82.85. A large hedge fund was a very notable seller of the cross today, apparently liquidating their long position.
More stops now seen through 82.80 but also buy orders clustered at 82.75.
AUD/USD up at 1.0010 from early .9950. The actions of the UK clearer gave the pairing a good boost. Australian corporates were also notable buyers today.
