- BOE minutes: MPC voted 8-1 to keep QE at 200 bln. No company for Posen, but QE draws closer
- UK PSNB for August 13.161 bln, worse than median forecast of 11.25 bln. PSNCR 11.834 bln, worse than median forecast of 7.0 bln
- Rumour: China’s September manufacturing PMI to be 52.9, up from previous 49.9 (out tonight/tomorrow)
- Greek govt due to announce measures later Wednesday- Greek official
- Greek FinMin: We will not put Greece’s fate at risk
- UK Treasury Minister Alexander: Will stick to existing spending plans – BBC
- Moody’s downgrades KBC bank to A1 from Aa3; outlook stable
- Buba’s Dombret: Rejects IMF proposal to expand ECB bond buying
- Commerzbank CEO: Banks’ operating environment not improved recently, August was not a good month for many
Bit of action, not too bad for a morning before an FOMC rate announcement. EUR/USD down at 1.3680 from early 1.3715, having been as low as 1.3641. News came early that Barcap had slashed its forecasts for EUR/USD (1-month to 1.33 from previous 1.42, 3-month to 1.25 from previous 1.46!!!)
Asian sovereign buying was noted on the initial dip below 1.3700 and it lent some temporary stability. That’s until another UK clearer (this one with strong far eastern ties) decided to hammer the pairing.
This took out well-documented buy orders down at 1.3650/60, but did not trigger stops through 1.3640, before recovering. FOMC now awaited.
Cable had a busy one. Talk has had “smart” names on the offer at 1.5750 yesterday and today, and it’s proven a robust ceiling for the pairing. Having opened at 1.5730 we’ve been as low as 1.5611 before rebounding.
We slipped ahead of the BOE minutes and public finance data releases. Sitting around 1.5680 on release, cable gave ground underminned by a mix of poor data and dovish minutes (although no one joined Posen in calling for more QE at the last MPC meet, further QE looks pretty imminent)
USD/JPY unchanged at 76.30.
USD/CHF little changed at .8725. EUR/CHF marginally easier at 1.2215 from around 1.2235 on my arrival. There had been alot of speculation the Swiss National Bank would signal a move to a 1.2500 peg this morning, but nothing was forthcoming. Despite the lack of news the cross has held up pretty well. Talk has had a strong Russian buyer just above 1.2200.
