- ECB’s Stark: After severe economic downturn, confident of gradual recovery in course of 2010
- French PM Fillion: French economy will sufffer “serious recession” in 2009. Slow recovery expected in 2010. Fillion sees 2.5% contraction in 2009
- Japan senior MOF official: Currencies not major issue at G7 FinMin meeting
- BOE minutes: MPC voted 9-0 to hold rates steady in April, continue £75 bln sterling asset purchase plan
- UK March jobless claims 73,700, better than median forecast of 116K. ILO jobless +177k to 2.1 mln in 3 months to February, rate 6.7%, exactly as expected.
- UK March PSNB £19.087 bln vs median forecast of £15.5 bln. PSNCR £28.355 bln vs median forecast of £18 bln. Both record highs for any month
- UK public borrowing for 2008/09 £89.958 bln vs Government forecast £77.6 bln, highesy fy on record
Sterling weakness a feature this morning. Things started OK with cable, and sterling in general, making ground early. Things however soon turned sour. Caution ahead of todays Budget was evident, worries over deteriorating government finances and diminisihing growth prospects to the fore.
The release of borrowing/jobs data (see above) did nothing to improve the mood and cable hit a session low 1.4524 soon after. It’s managed to recover it’s poise a little and we’re presently back up at 1.4570. Indeed some feel we might just see a classic sell the rumour, buy the fact reaction to the Budget statement.
Meanwhile EUR/USD came under pressure early, not helped by decent “CTA, prop” selling of the EUR/JPY cross. However buy interest surfaced down at 1.2880/00 and the pairing spent rest of morning recovering to around opeing levels, presently at 1.2940.
USD/JPY marginally lower on EUR/JPY, GBP/JPY sales. Risk aversion remains fairly high.
