Economic Data

  • French Budget deficit year to date widens to Euro 127.58 billion from a deficit of Euro 67.56 billion for the same period in 2008
  • Swiss CPI in Sept. 0.0 % m/m from +0.1 % expectations 0.0 % -0.9 % y/y from -0.8 % expectations -0.8 %
  • UK Halifax Building Society House Prices for Sept. +1.6 % m/m from +0.8 % expectations +0.6 % -7.4 % y/y from -10.1 % expectations -7.8 %
  • UK Manufacturing Output in August -1.9 % m/m from +0.7 % (revised from +0.9 %) expectations +0.4 % -11.3 % y/y from -10.2 % (revised from-10.1 %) expectations -9.3 %
  • UK Industrial Output in August -2.5 % m/m from +0.5 % expectations +0.2 % -11.2 % y/y from -9.3 % expectations -8.8 %

News

  • Societe Generale announces a Euro 4.8 billion rights issue to raise capital to repay government loans related to the economic recovery.
  • US Treasury Secretary Timothy Geithner says the IMF must be the “Truth Teller” to ensure individual countries FX policies are in alignment with the goals set out by G20. He reiterates the need for the IMF to have a more efficient executive board that better represents the global economy. The World Bank must focus on building resilience to further economic crisis but also create a firmer foundation for prosperity.
  • The story in the UK Independent newspaper was denied by the Saudi Arabia Central Bank Chief, the Russian Deputy Finance Minister, the UAE and the Kuwait Oil Ministers.
  • Conservative Party David Cameron said on BBC Radio that UK Conservatives “can’t rule out tax increases”.

Currencies

Following the “Demise of the dollar” article from the UK’s Independent newspaper that was first seen in the Asian time zone the dollar has been under pressure all morning particularly against the Euro which has steadily risen from a low of 1.4697 to a high of 1.4747 as European traders got hold of the story. The currency fell to 1.4705 when rumor has it that the BIS came in and sold Euros against sterling driving the cross from a resistance level of 0.9225 to 0.9175, the cross has since rebounded to again test the resistance briefly posting a high of 0.9241 a move aided and abetted by worse than expected UK data. Sterling against the dollar climbed in the early part of the session from 1.5960 to a high of 1.6045 which was boosted by far better than expected housing data from the Halifax Building Society. However it was trounced on the release of the weak manufacturing data shortly after and has traded with a soft tone ever since.

Dollar against the yen trading in a quiet range although did move higher on a short squeeze at the end of the Asian trading day but for the best part of the session was locked in a 88.95 – 89.10 range.

Dollar Swiss took a hit when the dollar was sold off at the start of the European session sliding from 1.0269 to its low of 1.0238 before getting a boost mid-morning to 1.0272 on the denials of the truth of the newspaper article. It then proceeded to trade the remainder of the session within a 1.0250 – 1.0260 band.

Aussie and Kiwi take a back seat after the action Down-Under earlier today both the Aussie and Kiwi have made minimal gains this morning posting highs in Europe of 0.8882 and 0.7360

Rates as at 7.30:- EUR/USD 1.4721/24 USD/JPY 89.10/13 GBP/USD 1.5893/97 USD/CHF 1.0259/63 USD/CAD 1.0632/36 AUD/USD 0.8872/76 NZD/USD 0.7344/49 EUR/GBP 0.9260/65 Gold 1024.50/1025.50 oil 71.32 Dollar Index 76.555

Ranges

  • EUR / USD 1.4697 / 1.4748
  • USD / JPY 88.84 / 89.40
  • GBP / USD 1.5880 / 1.6045
  • USD / CHF 1.0238 / 1.0288
  • AUD / USD 0.8822 / 0.8882
  • NZD / USD 0.7320 / 0.7360
  • EUR / GBP 0.9174 / 0.9269

Stock Markets

  • Nikkei 225 closed at 9,691-80 higher by 17-31 (+0.18 %)
  • Hang Seng closed at 20,811-53 higher by 382-46 (+1.87 %)
  • Kospi closed at 1,598-44 lower by 8-46 (-0.53 %)
  • Shanghai Composite Index closed for a National Holiday
  • FTSE 100 is at 5,104-09 higher by 79-76 (+1.59 %0
  • CAC 40 is at 3,725-44 higher by 50-43 (+1.37 %)
  • DAX 30 is at 5,601-52 higher by 92-67 (+1.68 %)

Have a great trading day