• German April wholesale prices +0.1% m/m, -8.1% y/y vs median forecasts of flat, -8.2%
  • Bk of France industry business sentiment index 75 in April vs revised 74 (prev 73) in March and as expected
  • UK March industrial output -0.6% m/m, -12.4% y/y. Better than median forecasts of -0.9%, -12.8% respectively. Manufacturing output -0.1% m/m, -12.9% y/y. Better than median forecasts of -0.8% m/m, -14.0% y/y
  • UK March global goods trade gap -£6.589 bln. Better than expected -£7.20 bln
  • EU to stress test its banking system for resilience to downturn, capital adequacy, by September – EU sources. Unlike American tests, is not a test of individual insitutions rather a highly aggregated test of the overall EU banking sector
  • Australia’s Government unveils largest deficit on record in latest budget. Fiscal deficits A$ 32.9 bln in 08/09, A$ 53.1 bln in 09/10. Net debt seen A$ 53.7 bln in 09/10, A$112.2 bln in 10/11.

Risk sentiment ok today, benefitting likes of cable, aussie, euro. European stocks, oil up. S&P futures point to rebound in U.S. stocks.

EUR/USD saw a decent rally, which accelerated to a session high 1.3677 when buy stops around 1.3650 were triggered. Reports of Bank of China selling in 1.3660/70 area and BIS selling in 1.3650/60 area have helped cap rally and we’re back at 1.3640 at writing.

Cable started off on a good footing, bolstered by the overnight release of encouraging RICS housing survey and BRC retail sales monitor. Buy stops just above 1.5200 accelerated the rally which got a further boost from better than expected industrial/manufacturing output data. Trade data was also a little bit better than expected. (see above). The pairing managed to peek over 1.5300 briefly before settling back, presently at 1.5265.

The JPY suffered against backdrop of improved risk sentiment, USD/JPY up 15/20 points at 97.45, EUR/JPY up at 132.90 from an early 132.35.