- China CBank advisor: China able to keep annual growth of 9% in coming decades
- RBA’s Lowe: Outlook for inflation justified early, modest rise in rates. November hike lessens risk of uncomfortably high inflation, substantial increase in rates
- Irish FinMin: Ireland will not default on its senior debt. A senior debt default would have durble negative consequences
- German October trade surplus 14.3 bln vs 15.4 bln in September, less tham median forecast of 15.0 bln. Exports -1.1% m/m, imports +0.3% m/m
- Bank of France raises Q4 GDP forecast to +0.6% from previous +0.5%; November industry sentiment indicator rises to 107 from 104 in October; services sentiment indicator rises to 98 from 96
- French October trade balance -3.431 bln in October, better than median forecast of -4.1 bln
- German October industry output +2.9%, some way stronger than median forecast of +1.0%
- UK CBI December manufacturing order book balance -3, up from -15 in November and much stronger than median forecast of -13. Highest since June 2008 as exports surge
Well I thought that was a pretty messy, choppy, generally directionless session. The main feature has to be sterling strength, cable up at 1.5780 from an early 1.5700 having gotten as high as 1.5803 at one stage. EUR/GBP is down at .8385 from early .8420.
A large US custodial was noted buying cable in early European trade. It’s amazing how often these entities end up on the right side of the big move. Guess it’s cos they can be rather lumpy. ACB selling was noted in 1.5770/80 area (1.5780 being fibbo level/ 76.4% of 1.5821-1.5668) but it didn’t manage to halt the rally as much stronger than expected CBI manufacturing order data helped propel us briefly above 1.5800.
EUR/USD at 1.3225, all but unchanged on the day. Early sell-off reached session low 1.3181 before recovery. Sovereign buying has been lending much-needed support (BIS, Asian and Middle Eastern sovereigns all notable buyers this morning)
Sell stops now gathering down in 1.3170/75 area.
USD/JPY touch firmer at 84.00 from early 83.90 having reached the dizzy heights of 84.06. Middle Eastern sovereign and UK clearer buying notable. Talk “smart money” (as opposed to dumb money I guess) has been paying for topside, short-dated options with strikes at 85.50. Guess we’ll see just how smart the smart money is in coming days.
AUD/USD up marginally at .9810 from early .9790 in very choppy trade either side of .9800. Reserve Bank of India and hedge fund buying was noted lending much-needed support.
