- BOE minutes: MPC voted 6-3 to hold rates steady. Dale joined Weale in calling for 25 bps hike. Sentance upped the ante by calling for 50 bps
- BOE minutes: Most members agreed medium-term inflation risk had risen, case for withdrawing stimulus had strengthened
- Euro zone December industrial orders +2.1% m/m, +18.5% y/y, much stronger than median forecast of -0.8%, +16.2% respectively
- BOJ’s Yamaguchi: Closely watching impact of commodity price moves on economy
- Is the Bundesbank spoiling for a fight over the destiny of EMU – AEP at The Telegraph
- Saudi King increasing housing and other benefits fo citizens ahead of return to country (been away getting medical attention)
- French Presidential diplomatic advisor: Europe must consider sanctions against Libya
- Italian ForMin: Estimates of 1,000 dead in Libya are credible
- Moody’s places Bahrain’s sovereign ratings on review for possible downgrade
Growing expectations the ECB and BOE will be raising interest rates in the near future have underpinned both euro and sterling.
EUR/USD up at 1.3735 from early 1.3690, having been as high as 1.3743 so far. Early reports had sell orders lined up from 1.3725 through to 1.3750 and the euro bulls have been busy chewing through them. Asian central bank selling has been notable north of 1.3720, last heard up around session high. It’s slowed, but not stopped the ascent.
We did see a very brief dip below 1.3700, but much stronger than expected euro zone industrial orders saw a quick recovery back above said level. Stops now said to be lined up above 1.3750.
Cable up at 1.6245 from early 1.6175, having been as high 1.6270 just after the latest BOE minutes were released. Minutes showed another MPC member joining the hawks camp. And for good measure Sentance upped the ante calling for a 50 bps hike.
USD/JPY up at 82.80 from early 82.60. Large hedge fund seen buying early in 82.60/65 area.
USD/CHF at .9970 effectively unchanged on the morning.
AUD/USD very marginally firmer at 1.0035 from early 1.0020.
