- ECB allots 131.933 bln euros in 91 day operation. Relatively low demand helps ease bank funding/liquidity jitters
- UK Nationwide June house prices +0.1% m/m, +8.7% y/y. Weaker than expected, median forecasts +0.3%, +9.0% respectively
- German June jobless -21k m/m to 3.23 mln vs median forecast -25k. Unemployment rate unchanged at 7.7%
- BOE’s Posen: Inflation has been rising in UK despite deflationary pressures. UK economy tentatively in recovery state, still subject to switiching to recession
- UK transport union RMT’s Bob Crow calls for generalised strike action
- Euro zone June inflation estimated at 1.4% y/y vs 1.6% in May, below median forecast of 1.5% – Eurostat
- Hungary PM aide: Govt plans precautionary standby loan deal with IMF for 2011. New IMF deal would boost market confidence in Hungary, act as safety buffer
- Japan Strategy Miinster: Want to end deflation in fiscal 2011/12
- 6.5 magnitude quake strikes near Oaxaca, Mexico
- Italy June business morale index slips to 96.1 vs revised May 96.4, but better than median forecast 95.9
Better morning for euro. Started around 1.2215, presently at 1.2285 having been as high as 1.2304. “Sharp blackbox fund” seen buying pairing early (as well as AUD/USD and USD/JPY).
Sell orders noted at 1.2220/50 held the early rally but eventually stops above 50 were tripped, the euro bolstered by results of the ECB 3-month tender. The bank allocated 131.933 bln, relatively low demand which has helped alleviate bank funding/liquidity concerns. (see above)
Mutterings of sovereign selling above 1.2300. Also talk of stops gathered up in 1.2310/20 area.
Cable slightly lower, down at 1.5035 from early 1.5070, but off session low 1.4982. Sterling not helped by usual month-end European central bank buying of the EUR/GBP cross. Weak house price data, comment by BOE’s POsen raising spectre of return to recession and call by leading trade unionist for general strike (see all above) will also have weighed.
Talk of stops through 1.4970 and 1.5100 now.
EUR/GBP up at .8170 from early .8105, having been as high as .8179. Talk of sell orders up at .8190/00.
USD/JPY at 88.75, marginally firmer from early 88.55. As mentioned above “sharp blackbox fund” seen decent buyer of pairing in early trade and that has provided robust base this morning.
