• Chinese Commerce Minister: Inflation is major concern for year due to imported commodity prices
  • Chinese Central Bank chief: CPI within expectations
  • France’s Sarkozy: Will move with other countries at G20 to adopt tax on financial transactions
  • Japan FinMin Kan: BOJ and Govt have been taking steps to turn price moves positive this year
  • MOF’s Noda: BOJ has sense of crisis about Japan’s deflation. Will be closely watching BOJ’s meeting next week
  • German EconMin: Don’t have a broad credit crunch so far. But there are some credit difficulties, especially with larger medium-sized companies
  • Russian Central Bank shifts floating rouble band boundary to 34.30 vs basket from 34.35 after buying $700 mln – traders
  • Spain’s January house sales rise 2.1% y/y, first rise in 2 years – INE
  • German BGA exporters assn: German exports will likely rise by 9% in 2010, imports by 7%
  • IFW institute sticks to German 2010 GDP forecast of +1.2%, but cuts 2011 forecast to 1.8% from previous 2%. Q1 2010 expects German economy to have contracted due to bad weather
  • UK inflation expectations for year ahead rise to 2.5% in February from 2.4% in November 2009 – BOE survey
  • Ukraine parliament speaker says new coalition formed. Former FinMin Azarov appointed PM
  • S&P: Euro sovereign borrowing to peak at euros 1,446 bln in 2010

Sterling has had a decent morning, cable up at 1.5045 from early 1.4985, while EUR/GBP is down at .9075 from around .9105.

Can’t see that there was particularly any new news. Cable dipped early to session low 1.4948 before bouncing. Reports soon circulated that a US custody bank was in buying and we were off to the races. Stops tripped on move above 1.5000 and again through 1.5030 and 1.5040 on way to session high 1.5062 before settling back.

A UK clearer was a notable seller of the EUR/GBP cross early. It was a different clearer to the one seen selling up above .9100 yesterday and a different one from the one recently noted buying 6month 1.4400 cable puts. The second part makes sense, I guess. Stops were tripped through .9090 on way to session low .9062 before slight recovery.

EUR/USD sits at 1.3655, very little changed on the day. The pairing has seen price action confined to a narrow range with no clear direction evident. Talk of buy orders down at 1.3600/20, small stops below. On topside, sell orders layered from 1.3670 up to 1.3705.

USD/JPY little firmer at 90.65 from early 90.35, with yen weak on the crosses. This comes despite talk of ongoing fiscal year end repatriation flows and worries China is about to hike rates/withdraw stimulus (which could cause risk aversion to spike.) Seems alot of focus on next weeks BOJ meet on March 16/17 and possibility of further monetary policy easing.