• Swiss consumer sentiment index -42 points in Q-3, down from -38 in previous quarterly survey. 16-year low. Versus -43 median forecast
  • German Markit construction index, based on survey of more than 200 construction firms, rose to seasonally adjusted 43.7 in July from 41.0 in June
  • Dutch July CPI eases to +0.2% y/y compared to +1.4% y/y in June. Inflation data much weaker than median forecast of +0.9%
  • Italy June industry output seasonally adjusted -1.2% m/m, work day adjusted -21.9% y/y, much weaker than median forecasts of +0.4%, -20.0% respectively
  • UK new car registrations in July +2.4% y/y. First rise in 15 months
  • UK construction orders rose 18% in Q2 2009 compared to previous quarter , but still down 21% on the year- ONS
  • German factory (manufacturing) orders rose +4.5% m/m in June, much stronger than the median forecast of +0.6%. Biggest gain since June 2007 and fourth consecutive monthly rise. Comes on the back of strong foreign demand
  • Moody’s: Global speculative- grade default rate rose to 10.7% in July from 10.3% in June, surpassing 2002 peak of 10.4%. Seen peaking at 12.2% in Q4 2009 and then declining sharply to 4.4% in July 2010
  • UK commercial property prices rose 0.2% in July, first positive reading since June 2007 – CBRE (World’s largest real estate broker)
  • Bank of England shocks markets and extends QE to £175 bln from £125 bln. Leaves rates steady, as expected

Forex markets did very little ahead of the Bank of England announcement and then all hell let loose. The BOE certainly caught the market on the wrong foot, in a major shock extending the quantitative easing programme from £125 bln to £175 bln.

Cable was already slightly on the defensive a little ahead of the announcement. Sitting at 1.6975 when the news hit the wires it duly collapsed and has been as low as 1.6827 so far. Presently at 1.6840.

EUR/USD is slightly weaker on the day, Presently down at 1.4375 from an opening around 1.4400. Been as low as 1.4368. Buy orders noted down at 1.4350/60 not yet troubled. Stops just below 50. ECB now awaited.

USD/JPY firmer on the day, presently at 95.50 from early 95.05. Underpinned by high US yields, talk of toshin launches tomorrow, generally decent risk sentiment.