- China’s five largest banks submit capital raising plans
- 2 German regional savings banks, that hold majority stake in WestLB, say they are prepared to let bank become insolvent – Frankfurter Allgemeine Zeitung
- Most global banks are still unsafe, warns S&P – AEP in The Telegraph
- German Q3 final GDP +0.7% q/q, -4.7% y/y
- Shanghai share index ends down 3.4%, biggest one-day drop in nearly 3 months
- French Nov business morale unchanged at 89.0 versus median forecast 91.0
- French Oct consumer spending up 1.1% m/m, much stronger than median forecast of +0.4%
- Vice Foreign Minister: China will keep yuan at a basically stable, balanced level
- IFO Nov German expectations 98.9, stronger than median forecast of 97.2, business climate 93.9, stronger than median forecast of 92.5
- Germany’s WestLB says in constructive talks with German bank rescue fund Soffin about transferring 85 bln in risky assets from its portfolio into bad bank. Has not asked for support from Landesbank assistance fund
- UK mortgage approvals for house purchase 42,238 in Oct vs 42,073 in Sept, up 97.7% y/y – BBA
- Russia central bank cuts benchmark refi rate to 9% from 9.5%
- BOE’s King: A recovery will soon be underway
The JPY and USD are firm this morning, with risk appetite a little jaded. There have certainly been some increased jitters regarding the health of global banks (see first three headlines above).
EUR/USD at 1.4945 is hardly changed on the day. Started off under heavy pressure as traders focused on article regarding WestLB in FAZ (see above). We reached a session low 1.4889 before recovering. Rumours circulated that the IFO report was going to be better than expected and this helped lift the pairing back above 1.4900.
We stood around 1.4920 on release and the pairing has seen some marginal improvement in the wake of the actual stronger than expected numbers (see above) However talk of BIS selling around 1.4940 and sell orders touted at 1.4950/60 has helped cap the recovery.
USD/JPY is trading a little lower, down at 88.65 from an early 88.85. The bank jitters/wobbly risk appetite have helped the JPY post across the board gains, EUR/JPY down at 132.45 from early 132.65. Back with USD/JPY; Japanese trust banks have been notable buyers this morning helping limit slippage, and there is talk of Kampo interest lying in wait down at 88.50.
Cable is at 1.6540 from early 1.6580 having been as low as 1.6498, sterling in general not helped by increased banking jitters. BOE’s King was before the Parliamentary Treasury Committee, but a plethora of comments didn’t seem to impact on the currency.
AUD/USD little easier, down at .9185 from early .9210 on jaded risk appetite.
