• German August PPI +0.5% m/m, -6.9% y/y vs stronger than median forecasts of +0.2%, -7.2% respectively
  • BOE’s Miles: UK might be out of recession in 6 or 9 months
  • Shanghai share index has bad end to week, closes down hefty 3.2% on the day
  • Euro zone non s.a current account surplus 8.8 bln euros, s.a 6.6 bln
  • BOE: UK lenders approved 57k mortgages in August from 53k in July
  • UK August PSNB £16.119 bln vs better than median forecast of £17.6 bln, PSNCR £10.379 bln, better than median forecast of £14.5 bln
  • UK prov M4 money supply +0.1% m/m, +12.6% y/y, weaker than median forecasts of +0.8%, +13.8% respectively. Lowest y/y rate since Spet 2008
  • UK mortgage lending down 37% y/y in August – Council of Mortgage Lenders
  • Russia’s Putin: Need either several reserve currencies or global rules of economic behaviour
  • Japan’s FinMin Fujii: Don’t want to be labelled as backing a strong yen

Been quite a busy morning, but when all said and done not alot of net change.

EUR/USD started off around 1.4720, sold off aggressively to 1.4648 session low before rallying back. Presently at 1.4710.

Slumping Chinese stocks helped trigger a bout of pretty heavy profit-taking on USD shorts. Buy orders between 1.4680/00 held the line for awhile, before Chinese stocks extended their losses to 3% and that was the signal for accelerated losses in EUR/USD as 1.4675 stops were tripped.

EUR/USD got as low as 1.4648. Sources reported talk of Asian sovereign bids at 1.4640 and that was that. It’s a little unclear whether any sovereign actually bought or if they were front run, but when all said and done it didn’t really matter.

Cable opened lower and came under further pressure early. The market noted two particular articles, one in The Telegraph, one in the WSJ. There was also caution ahead of the latest public finance data (see above), and ongoing speculation of an early BOE move to cut the deposit rate paid on bank reserves and the little matter of probably further QE just down the road.

Cable having started out around 1.6390 hit a session low 1.6297 before being saved by two things. Firstly the Reserve bank of India stepped in buying good amounts around 1.6300 and then the public finance data, although still crap, came in better than expected. Cable hasn’t looked back since. We’re presently back up at 1.6365.

USD/JPY steady. The pairing did spike to session high 91.47 when comments from Japan Finance Minister Fujii hit the wires. The official said he didn’t want to be labelled as backing a strong yen. We’re however now back down at 91.25, pretty much where we started.