• French June consumer spending +1.4% m/m vs -0.2% in May, stronger than median forecast of +0.3%
  • NIESR predicts UK budget deficit to remain as high as £120 bln or 7.5% of GDP, by 2013/14
  • BOE MINUTES: MPC voted 9-0 for steady rates and to leave QE at £125 bln in July. August seen as better time to reassess QE. Q-2 GDP fall likely to be smaller than MPC had thought 2 months ago. Surveys suggest momentum in second half of year going to be greater than expected back in May.
  • Euro zone May industry orders -0.2% m/m, -30.1% y/y, much weaker than median forecasts of +1.9%, -28% respectively
  • UK CBI manufacturing order book balance -59 in July, down from -51 in June, worse than median forecast of -46. Quarterly business situation balance improved to -16 in July from -40 in April

When all said and done, not alot of net change in the majors this morning. That’s not to say we haven’t seen some action.

Cable and sterling crosses have been active. Cable having started off around 1.6400 came under heavy pressure, underminned by a number of negative newspaper articles covering such things as the parlous state of public finances, bank capital needs, possible continuation of house price decline, lack of business optimism etc etc. There was also evident caution ahead of the BOE minutes and UK CBI industrial trends data.

Cable got down as low as 1.6312 before steadying. It stood around 1.6335 when the BOE minutes were released and the fact that nothing untoward was mentioned regarding QE and given the slightly upbeat tone (see above) cable enjoyed a decent relief rally.

The pairing stood around 1.6360 prior to UK CBI industrial trends release. The manufacturing order book balance made for poor reading, but there was some consolation in fact quarterlybusiness situation balance improved sharply. There followed another relief rally and we’re back up at 1.6400, unchanged on the day.

EUR/USD sits at 1.4200, effectively unchanged on the day. Very narrow rangebound trade, waste of time basically. Sources note buy orders down at 1.4140/50, stops just below there. Sell orders up at 1.4250 and then 1.4275 up though 1.4300 (just like yesterday. )

USD/JPY marginally lower at 93.45 from an early 93.70. Buy orders noted down at 93.25/35 were just enough to soak up selling pressure. Apparently, I’m being told CitiTechs have gone short USD/JPY at 93.55 targetting 87.00 with a stop at 94.95. For what that’s worth.