• Greek report to EU says implementation of deficit plan ahead of schedule
  • Spain’s Economy Minister: 2009 deficit could be lower than previous forecast of 11.4% of GDP
  • ECB’s Gonzalez Paramo: Measures taken by Greece convince ECB, IMF, European Commission. Responsibility for Greece’s future lies with euro zone countries
  • German January trade surplus s.a 8.7 bln euros vs 16.6 bln in December, much worse than median forecast 16.0 bln. Exports -6.3% m/m, imports +6.0% m/m
  • French January industry output +1.6% m/m, much better than median forecast +0.2%
  • SNB report to parliament: Swiss GDP to grow by around 1% in 2010
  • UK PM Brown: UK recovery still in early stages and remains fragile. Believes Britian will maintain AAA credit rating
  • Italy January industry output +2.6% m/m, much stronger than median forecast +0.6%
  • UK January industrial output -0.4% m/m, much worse than median forecast +0.3%. Manufacturing output -0.9% m/m, much worse than median forecast +0.3% m/m. Both m/m falls biggest since August 2009
  • Italy final Q4 GDP revised downward to -0.3% q/q, -3.0% y/y from previous -0.2%, -2.8% respectively – ISTAT

Euro has had an Ok morning after shaky start. EUR/USD is up at 1.3620 from an early 1.3595, receiving a late morning boost from news that Greece has told EU implementation of deficit plan is ahead of schedule. EUR/JPY is up at 123.10 from early 122.40, while EUR/GBP is up at .9120 from early .9085.

It wasn’t all a bed of roses though. EUR/USD initially came under pretty heavy pressure, the euro underminned by demonstrably weaker than expected German trade data (see above.) We got as low as 1.3546 before recovery, a major French bank having apparently backed up the truck and bought aggressively around the lows. I’m sure they’ll be reports of sovereign buying down around lows but didn’t hear them myself.

Cable started around 1.4965 and came under heavy pressure right from the get go. Reports had a UK clearer and hedge funds selling aggressively. The clearer was said to have been the same one seen buying 6 month 1.4400 cable puts recently.

We got below 1.4900 buy strong buying emerged just ahead of technical support at 1.4880 (76.4% retracement of 1.4781/1.5197). This lifted cable higher and reports of sovereign purchases helped cable get back to around 1.4950 just ahead of the 09:30 GMT release of truly horrible UK industrial/manufacturing output data. Cable swooned and eventually got as low as 1.4874. We’ve seen some recovery, presently back up at 1.4920.

Reports SNB intervened in EUR/CHF lifted the cross from 1.4612 session low. But there has been no followthrough (session high 1.4630) and we’re presently at 1.4620, effectively unchanged on the day.

USD/JPY sits up at 90.40 from early 90.05 amid speculation BOJ could ease monetary policy further at their March 16/17 meeting. Stops tipped through 90.65.