- German Ifo business climate 108.7 in August, worse than median forecast of 111.0. Had been rumour of 109.0 read before release. Current conditions 118.1, worse than median forecast of 120.0. Expectations 100.1, worse than median forecast of 103.0.
- Ifo’s Abberger: Strong fall in expectations is in all sectors of the economy
- Euro zone June industrial orders -0.7% m/m, +11.1% y/y, weaker than median forecasts of +0.5%, +12.1% respectively
- ECB buys Italian bonds……….again
- Bank of Canada’s Macklem: G20 has fallen short in correcting global imbalances – Dow Jones
- Finnish PM Katainen: Greek collateral talks continue – Kauppalehti
- Moody’s: Future ratings actions on Japan could be either on upside or downside. Japan’s current account surplus, net overseas investment position is buffer against financial turbulance
- Spain’s EconMin: Will reach deficit of less than 3% at end of 2013
EUR/USD up at 1.4455 from early 1.4410, having been as high as 1.4475. The single currency has been somewhat resilient in the face of more weak economic data (German Ifo survey/euro zone industrial orders-see above)
We slipped lower just ahead of the Ifo release as rumour circulated that the business climate read was going to come in at a lower than expected 109.00. Post release, stops were tripped through 1.4385 but we only got as low as 1.4378 before recovering quickly.
Something of a classic sell the rumour, buy the fact price action, when all said and done. Indeed the Bank of Korea, who had sold into a fledgling rally in very early Europe around 1.4430, was seen scooping up the pairing below 1.4390 in the post Ifo dip.
Later we had reports of China buying as well and this helped extend the rally, which got a final lift to session high 1.4475 as a well know US investment bank bought aggressively. We’ve subsequently slipped back slightly. Buy stops now touted through 1.4475 before sell orders clustered 1.4495/00 (1.4500 barrier anyone?)
USD/JPY sits at 76.65, effectively unchanged on the day.
Cable up very marginally at 1.6515 from early 1.6490 in uninspired trade.
AUD/USD was fairly active this morning. Morgan Stanley have come out suggesting it’s time to short the AUD and NZD and this helped pressure both pairings in early European trade. From early 1.0495 we sold off to session low 1.0444 before recovering, presently at 1.0490. China was seen buying this morning, which lent support.
