- German Gfk August consumer sentiment indicator up at 3.5 vs 3.0 in July, better than median forecast of 2.9.
- German June import prices +0.4% m/m, -11.3% y/y, weaker than median forecasts of +0.6%, -11.0% respectively
- China H1 2009 urban consumer spending rose 8.9% – National Bureau of Satistics (NBS)
- Euro zone leading economic index for June up 1.5% at 95.9 vs 1.7% gain in May – Conference Board
- Euro zone June M3 annual growth 3.5%, exactly as expected. 3-month moving average April-June 4.1%, slightly above median forecast of 4%
- Conditions in UK corporate credit market improved in Q-2 – BOE report
- “Green shoots” in UK retail are unsustainable – Fitch
- German Govt spokesman Ulrich Wilhelm: There is a growing consensus that the economic freefall in Germany is over
Risk appetite is in good shape at the start of the new week, which has served to undermine the JPY and USD.
Better than expected German consumer sentiment data, decent Chinese urban consumer spending data and upbeat comments from a German government official (see above) are a few of the things helping underpin sentiment this morning.
Obviously strong Q-2 corporate earnings are one of the mainstays of the heightened risk appetite.
EUR/USD having started off around 1.4230 has been as high as 1.4298. Sources had noted sell orders up ahead of 1.43oo, where there is thought to be barrier option interest and these have just about held the line, so far.
The EUR/USD gains accelerated when buy stops just above 135.50 in EUR/JPY were triggered. The cross is presently up at 135.95 from an early 134.95, having earlier posted a session high 136.03.
USD/JPY has moved up to 95.15 at writing from an early 94.85, with the JPY seeing broad-based weakness against the back drop of strong risk appetite. Sources noted sell orders at 95.00 up through 95.30, which have helped slow the advance.
Traders will also have noted talk last week of China lying in wait with a sell interest up at 95.30.
Cable rallied early, quickly hitting a session high 1.6523. However, not for the first time, the pairing’s stay over 1.6500 proved brief, this time very brief.
Sources reported Middle East names buying the EUR/GBP cross aggressively and this helped undermine cable. Infact, although we have no confirmation of such, there’s a very good chance same Middle East names were offloading cable as well.
Cable is presently up at 1.6485 from an early 1.6450.
The EUR/GBP cross is presently up at .8670 from an early .8645, having been as high as .8687.
