• Japan FinMin Fujii: Competitive currency devaluations would ruin world economy. Weak yen better for exports, but shouldn’t steer economy by this policy alone
  • Japan FinMin Fujii comments reflect growing tension between new government and central bank
  • Shanghai share index ends down 2.8%, biggest on day lose in 5 weeks
  • China trade official sees no big yuan move until significant export recovery. Trade will take 2-3 years to recover to pre-crisis levels
  • Swiss UBS consumption index rose to 0.63 in September from revised 0.62 in August
  • French industry demand fell in Q-3, but far less sharply than in Q-2. Seen improving in Q-4 – INSEE
  • French October consumer confidence index -35 from unrevised -36 in September, in line with median market forecast
  • Dutch October business confidence -7.8 from -9.8 in September
  • Italy October consumer confidence falls to 111.7 vs 113.6 in September, weaker than median forecast of -113.7
  • Euro zone September M3 annual growth +1.8%, weaker than median forecast of +2.2%

The main feature of the morning trade has been some general across the board improvement in sterling with cable up at 1.6425 from an early 1.6340, while EUR/GBP is down at .9065 from around .9110.

Cable had seen a US bank buying aggressively in Asia overnight from around 1.6300, the interest said to be on behalf of an Asian sovereign. No sooner had European trading gotten underway than cable was on the move higher again, sources noting more Asian sovereign buying.

It didn’t take long for Middle Eastern names to enter the fray as decent buyers, and we quickly went up to test touted sell orders at 1.6390/00. These initially had the effect of a brickwall, forcing cable back quite sharply.

But the cable bulls weren’t to be defeated so easily, and accelerated EUR/GBP selling helped push cable through 1.6400, triggering buy stops just above, eventually getting to a 1.6438 session high. The cable bulls haven’t been quite able to get through well-touted sell interest said to extend from 1.6400 up through 1.6450.

EUR/GBP started around .9110 and sold-off early, a German name seen as a decent seller. Sell stops were triggered on a move through .9080 and we’ve been as low .9054. We’re presently at .9060. Talk of buy interest at .9030 down through .9000.

EUR/USD started around 1.4890, where it sits at writing, after a fairly subdued morning trade. We’re effectively consolidating after the heavy sell-off Monday. An early rally promised an active day, with a session high of 1.4927 reached quickly. However an Asian sovereign stepped in selling at 1.4915/25 and that was that. A German name joined in as a notable seller and we were fairly quickly back below 1.4900, were we’ve wallowed for most of the mid to late morning.

Talk to buy orders 1.4840/50, stops gathered just below 1.4840 and then more buy interest seen at 1.4815/25. Sovereign interest seen mixed in with the various buy interest, not surprisingly.

USD/JPY sits at 92.00 from an early 92.10. Basically the pairing has been completely sidelined, not even reacting to a plethora of comments from Japanese FinMin Fujii (see above)