• German June prelim retail sales -1.8% m/m, -1.6% y/y, much weaker than median forecasts of +0.5%, +0.9% respectively
  • Swiss July PMI 44.30, stronger than median forecast of 43.6
  • Italy July factory PMI 45.4 vs 42.7 in June, stronger than median forecast of 44.3 and highest read in 11 months
  • French July-final factory PMI 48.1 vs flash 47.9, highest read in 13 months
  • German July-final manufacturing PMI 45.7 vs flash 45.2
  • Euro zone July-final manufacturing PMI 46.3 vs flash 46.0
  • Spanish consumer confidence 76.1 in July vs 66.4 in June. 17-month high
  • UK July factory PMI 50.8 vs 47.4 in June, much better than median forecast of 47.8 and highest read since March 2008
  • French new car sales up 3.1% in July – CCFA

The USD and JPY have weakened this morning against the backdrop of heightened risk appetite. EUR/USD is up at 1.4290 from an early 1.4250, while EUR/JPY is up at 135.65 from around 134.95.

EUR/USD having started off around 1.4250 came under pressure early. China having been a notable seller overnight in Asia up around 1.4300 was seen selling aggressively in early Europe. We heard them selling as low at 1.4225, although they might have been in even lower as a session low 1.4207 was posted. The release of much weaker than expected German retail sales data didn’t help matters.

However the pairing was soon recovering as a run of good data (see above) hit the wires. It was one piece of better than expected data after another and stocks lifted higher. Eventually stops above 1.4300 were triggered resulting in a spike to a session high 1.4316. We’ve settled back a little to 1.4295 at writing.

Cable started out around 1.6745 and dipped initially. However good buying interest re-surfaced around 1.6700 and we were soon headed higher again as the plethora of decent European economic data hit the wires.

Initially sell orders noted up at 1.6790/00 looked like proving a durable barrier to the upside, but then a double whammy of better than expected HSBC earnings and much better than expected UK factory PMI (see above) helped take out the sell orders and trigger stops just above 1.6800.

The stops must have been pretty lumpy as cable motored higher at some speed, hitting a session high of 1.6879 before settling back. The pairing presently trades at 1.6840.

USD/JPY marginally higher against the backdrop of strong risk appetite, presently at 94.90 from an early 94.70.