- El Pais carries story suggesting Russia’s sovereign wealth fund may lift its embargo on buying Spanish bonds
- Russia’s FinMin Kudrin: Russia isn’t planning to buy Spanish bonds. Will continue to monitor the economic situation
- China researcher: Value of forex reserves face huge risk of depreciation. Need to add more euro, yen assets to reserves – Dow Jones
- UK December CPI +1.0% m/m, +3.7% y/y, much stronger than median forecasts of +0.7%, +3.3% respectively. Sends cable shooting over 1.6000. Biggest m/m rise ever. Biggest y/y rise since April 2010
- ZEW German economic sentiment 15.4 in January, up sharply from 4.3 in December and much stronger than median forecast of 6.8
- EU FinMins: Agree to test bank liquidity in next round of stress tests. ECB expects more banks to fail 2011 tests than in 2010 because of liquidity criterion
- Goldman Sachs shuns the BRICs for Wall Street – Latest from AEP at The Telegraph
- BOE’s Fisher: Inflation is “very uncomfortable” but I wouldn’t change past policy
Euro has seen across the board gains this morning. EUR/USD presently up at 1.3395 from early 1.3310, having been as high as 1.3428 at one stage. China came in buying just as European traders arrived at their desks and that set the tone for the day. Reports of El Pais story circulated (see above) and we were off to the races, sell orders clustered around 1.3350 simply brushed aside.
Then comments from Chinese researcher (see above) helped extend the rally up through 1.3400. Then extended even further upto 1.3428 in wake of much stronger than expected German ZEW report. before slipping back. Russian FinMin Kudrin has came out and poured cold water on the El Pais story, but it hasn’t done too much damage.
More stops through 1.3430 now.
Cable and sterling have done pretty well too. Cable up at 1.6005 from early 1.5940. Well respected large hedge fund seen notable buyer this morning ahead of the UK CPI data release. They were right on the money(guess that’s why they’re well respected) as the much stronger than expected price data sent cable spiking through 1.6000 on way to 1.6059 session high.
We’re presently back at 1.6005. EUR/GBP up at .8370 from early .8350, sterling like all the other major currencies giving ground to the bubbly euro.
USD/JPY sits at 8250 from an early 82.50. How exciting. I don’t know how those poor USD/JPY traders cope with all the volatility, I really don’t.
