• German Oct Real Mfg orders up 5.2% m/m (expected +1% m/m)
  • EU’s Juncker: S&P warning timing was no coincidence
  • Germany’s Merkel: S&P’s credit watch is S&P’s own responsibility…
  • S&P affirms ‘Aa-/A-1+’ sovereign rating of China
  • Greek poll: 76.7% want to stay in euro
  • German ruling conservative’s Budget spokesman: S&P warning could have positive effect
  • German Econ Min Roesler: Germany won’t be influenced by S&P
  • ECB’s Noyer: S&P methodology has become much more political
  • Swiss CPI -0.2% m/m, -0.5% y/y, weaker than Reuters’ median forecasts +0.1%, -0.3% respectively
  • UK Halifax house price index -0.9% m/m in November
  • US won’t participate in boosting IMF funds –German Daily Frankfurter Allgemeine Zeitung.
  • German Fin Min Schaeuble: European heads shouldn’t tell ECB what to do..

Europe opened with risk off the table after a late NY announcement from S&P that Europe 17 states will be put on a negative credit watch with a view to possible downgrades. Asia followed sentiment in NY with equities drifting lower along with risk currencies, aided by a RBA rate cut of 25 bps

EUR/USD opened around 1.3375/80 and fell on early leveraged sales to 1.3333 having tweaked some sell stops down through 1.3350.

Comments that US wouldn’t boost IMF funds added to the negative tone, but Middle Eastern buying recovered the move and weak Swiss CPI helped EUR back up to around 1.3380.

Hedge Funds then attempted to sell it back down, but strong German Mfg data led a move up through 1.3400 through some 1.3410 stops to 1.3428, before drifting back to 1.3400.

GBP/USD tracked the EUR through 1.5591-1.5664 , but lagged the move higher as EUR/GBP jumped from early lows of o.8538 to 0. 8580

EUR/CHF got a leg up on weaker CPI with a bounce from 1.2360 to 1.2419, but is still struggling to maintain a foothold above 1.2400, and slipped off later again to 1.2370

AUD/USD found good support ahead of sell stops at 1.0150, trading a 1.0156-1.0255 range with real money buying and EUR/AUD selling keeping the pair buoyed up after the O/N rate cut from the RBA

USD/JPY continues to struggle to hold onto even the smallest gains drifting off to 77. 63 despite a firmer EUR/JPY.

EUR/JPY picked up with EUR/USD from 103.64 to 104.34 , before running into offers.

January Nymex WTI perked up to 101.28 from 100.37 and Gold tacked on $10 to 1723

European indices were flat to marginally lower with the DAX the larger faller by around -0.8%