- French prelim Q4 GDP +0.3% q/q, much weaker than median forecast +0.6%
- French FinMin sees stronger growth in Q1 2011
- German prelim Q4 GDP +0.4% q/q, slightly weaker than median forecasts +0.5%
- Euro zone Q4 GDP flash estimate +0.3%, marginally weaker than median forecast of +0.4%
- BOJ’S Shirakawa: Upside, downside risks to Japan economy balanced
- UK January CPI +0.1% m/m, +4.0% y/y, exactly in line with median forecasts, but not quite as bad as some had feared
- BOE’s King: Should be in no doubt that when balance of risks requires it MPC determined to adjust policy to bring risks back to balance
- ZEW February German economic sentiment index 15.7, marginally better than 15.4 in January, but not as good as median forecast of 20
- Milan judge sends Berlusconi for immediate trail on sex, abuse of power charges
Sterling has had a good morning making across the board advances, but it’s been a choppy affair. Cable up at 1.6125 from early 1.6055, having been as high as 1.6133 so far after stops tripped through 1.6115. EUR/GBP down at .8395 from early .8420.
Cable was well bid into this morning’s CPI data release, the market wary of a worse than expected number. Well known US investment bank very notable buyer ahead of the numbers. When the data came in as expected we saw a sharp sell-off.
But the decline wasn’t lasting though, as the release of King’s inflation letter soon had the sterling bulls back on top. Many in the market think the comments in the letter suggest the Old Lady is getting very close to hiking UK rates.
EUR/USD has had an exeedingly choppy morning. Sits at 1.3540, marginally firmer from early 1.3520. But inbetween we’ve been down to 1.3461 and back up to 1.3552. Much weaker than expected French Q4 GDP put the euro under early pressure, with Eastern European selling notable.
There were reports of buy orders lined up down at 1.3450/60 and it wasn’t a huge surprise when we rallied off the 1.3461 low. Reports, as is the custom of late, had Asian sovereigns strong buyers during the rally. German buying was also notable.
Early reports had sell orders at 1.3545/55 and they’ve so far managed to cap the topside. Talk of stops now through 1.3565.
USD/JPY up at 83.70 from early 83.45. US treasury yields little firmer, which will have helped underpin the pairing. Large US custodial bank notable buyer this morning. Talk of stops through 83.80.
