- German Gfk Consumer sentiment index 4.3 in October from 3.8 in September (revised from 3.7)
- French Consumer Confidence -36 in Sept from -38 in August (revised from -39)
- French Q2 GDP confirmed at +0.3% q/q
- Italian Retail Sales -0.4% m/m in July exactly the same as the previous month, -2.6% y/y from -0.8% in June
- UK Business Investment for Q2 -10.2% q/q from -7.6%, market expecting -10.4%
-21.8% y/y from -9.7%, market expecting -18.4%
- German Finance Minister says that financial regulatory success is a bigger task than he expected and that there have been no concrete figures set in place yet for higher capital requirements for banks by G20.
- France’s G20 delegation say that there is a “fairly large” consensus against reducing the number of European board seats on the IMF as reportedly proposed by G20. The cutting of seats on the Board is to make room available for representatives from developing countries.
- Swiss National Bank’s Thomas Jordan says they will continue to fight the appreciation of the Swiss franc against the Euro aggressively. Jordan says that correcting monetary policy in the current environment would clearly be premature. The Swiss economic outlook has improved but recovery is likely to be slow and unemployment will rise. The chance of deflationary pressure flaring up in the near term cannot be fully excluded. The SNB will fate in the franc in policy once the crisis is over and will use interest rates form this after there is an end to the zero rate policy. Jordan says the aim of FX intervention is not competitive deflation.
- ECB’s Mersch says the crisis is not yet behind us. It is important to think now about exit strategies. Excess liquidity is spread unevenly between the banks. A worsening in credit cannot be ruled out if there is another worsening in the economy. The recovery next year will not be enough to make up for the rate of the decline. There is a risk that the crisis has lowered the potential for long term growth. The exit timing will take into account conditions in each sector and not just the economy as a whole.
- Swiss National Bank, Thomas Jordan, says Switzerland will remain attractive for banking despite regulation changes. He added that the recent appreciation of the Swiss franc against the Euro has only shown small volatility. Once rates are at ordinary levels it would make sense to use interest rates rather than currency intervention for monetary policy.
- News that Iran is building a second Nuclear Enrichment Plant. This has been confirmed by the IAEA (International Atomic Energy Association) who say they have asked Iran for an immediate inspection of the plant to ensure non-proliferation safeguards. The UK and France are set to accuse Iran of concealing covert nuclear plant.
- Euro-dollar started the session off on its lows before a short squeeze on the European opening saw it break 1.4670. Tried to test the offers at 1.4700 but couldn’t break through initially. On dollar selling Euro broke through 1.4700 posting a session high of 1.4718 before easing back below 1.4700.
- Dollar-yen slowly drifted lower from 90.78 to the 90.55 area before the dollar was aggressively sold off in the late European morning taking out the bids in dollar yen from 90.50 down to 90.00 filling a barrier option before bouncing back to 90.20.
- Sterling opened up at 1.5955 moving higher and then breaking back through 1.6000 as Asian names were caught short the currency. The rate bounced between 1.599 and 1.6020 with a lot of 2 way action before making a morning high of 1.6045 when the dollar came under pressure.
- Dollar Swiss traded in a quiet range with traders wary of intervention if Euro Swiss should fall below 1.5100.
- EUR / USD 1.4651 / 1.4718
- USD/JPY 89.98 / 90.79
- GBP / USD 1.5955 / 1.6045
- USD / CHF 1.0267 / 1.0303
- AUD / USD 0.8645 / 0.8710
- NZD 0 USD 0.7145 / 0.7210
- EUR / GBP 0.9154 / 0.9184
- Nikkei 225 closed at 10,265-98 down 278-24 (-2.64%)
- Hang Seng closed at 21,024-40 down 26-33 (-0.13%)
- Kospi closed at 1,691-48 down 2.1 (-0.14%)
- Shanghai Composite Index closed at 2,838,842 down 14,712 (-0.52%)
- FTSE trading at 5,104-37 higher by 25.10 (0.49%)
- CAC 40 trading at 3,757-12 lower by 1.24 (-0.3%)
- DAX trading at 5,601-64 lower by 3.57 (-0.06%)