• UK Sept Mfg PMI 53.4 (Fcast 53.8), Lowest Since Nov Vs Revd 53.7 in Aug
  • Sept EZ Final Mfg PMI Rvsd Up To 53.7 (53.6 Flash, 55.1 Aug), Lowest Since Jan
  • German Sept Final Manufacturing PMI at 55.1 (Flash 55.3, Aug 58.2)
  • Italy Sept Manufacturing PMI 52.6 (Aug 52.8, F’cast 51.8), Lowest Since Feb
  • Peripheral 10-Year Government Bond Yield Spreads Vs Bunds Generally Tighter
  • Irish Debt Agency Says Market Taking Positive View That Ireland is Dealing With its Problems
  • Irish Debt Agency Says Appropriate To Exit Market Temporarily to Allow Investors Digest Information
  • Irish Debt Agency Says Market Feedback on Call to Cancel Auctions Has Been Positive
  • Trade-Weighted Sterling Hits 4-Month Low Of 79.8
  • German retail sales drop 0.2% on year; +2.2% on year
  • EZ unemployment 10.1% in Aug vs. rvsd 10.1% in July
  • EU wide unemployment rate 9.6% in Aug vs 9.6% in July
  • Spain’s car sales down 26.9% – ANFAC

The London session has been a mirror of yesterday although not quite so volatile. ACBs have taken Euro, AUD, GBP off the lows with players left to cover their shorts. This was especially the case in EUR/USD above 1.37 when large stops (many option related) kicked in. Plenty of data (mostly PMIs) but not really market moving. ACBs continue to hold the upper hand once more after another big day of intervention in Asia. The BOK reportedly bought arounf $2bln today taking his tally for the week to $8bln ish. All up dealers are putting this weeks heavy bout of Asian central intervention in the $15-20bln category.

EUR/USD traded a tiny 1.3619/68 range in Asia supported by the strong China PMI number. As has been the case all week ACBs started buying EUR/USD in early London and the pair just kept going higher and higher. Stops kicked in above 1.37 with another option barrier tripped at 1.3750. EUR/USD topped out at 1.3764- last at 1.3740.

USD/JPY has remained heavy throughout the day. After trading a tiny 83.37-58 range in Asia the pair continued to drift lower in London finally matching yesterdays low of 83.16. EUR/JPY sell orders have been triggered by the EUR/USD move higher and this in turn weighed on USD/JPY – last at 83.20.

GBP/USD has witnessed a big move off its low in London. After holding a tight 1.5710-50 range in Asia, London made a marginal new low at 1.5705 before resuming its up move. The pair was at first lagging the Euro up-move with EUR/GBP racing to 0.8691. GBP/USD finally found its feet with EUR/GBP reversing savagely back to 0.8660 and propelling GBP/USD to a high of 1.5874; last at 1.5852. No real news just position adjustments.

AUD/USD has remained well supported throughout the London sesion after taking a bit of a buffering during the Asia session. The pair hit 0.9703 in Asia on the strong Chinese PMI number but sunk back into the 09660s heading into London. AUD/USD hitched a ride higher with the strong Euro but the 0.9730 area has proven formidable so far. High seen 0.9734; last at 0.9724.

Asian stocks were all in the black albeit by modest amounts helped by the strong China PMI data and solid South Korean export data. This trend continued into London with a similar performance by European bourses.

Gold made another fresh new high in London at 1317.10 no doubt helped along by ACB buying.