• German Gfk September consumer sentiment indicator 4.1, up from 4.0 in August and better than median foreast of 4.0
  • Canadian FinMin Flaherty sees Canadian real GDP at around 3% this year. (doesn’t seem to like rating agencies very much)
  • Italy August consumer confidence index falls to 104.1 from 105.5 in July, below median forecast of 105.2 and lowest read since March 2008
  • UK CBI retail sales balance +35 in August, up from +33 in July and much better than median forecast of +20
  • Japan vice FinMin Ikeda: Rapid yen rise undesireable for Japan economy
  • Japan ruling party policy chief Gemba: Govt should consider extra budget for this fiscal year. Party panel discussed forex intervention

Active little morning. Hummed along quite nicely, but when all said and done not a whole lot of net change.

EUR/USD at 1.2700, slightly easier from early 1.2715. BIS sold into early rally attempt which helped the pairing top out initally in 1.2730’s after better than expected German consumer sentiment data.

We dropped briefly back below 1.2700 before a sharp spike higher as China entered the market buying. We quickly made new session high at 1.2746. However reports of sell orders layered from 1.2750 through to 1.2800 were enough to cap rally. The Swiss National Bank could have offloaded more around the highs, but didn’t get confirmation of such. Russia was certainly a seller on the way down.

We got back below 1.2700 for a little while, before BIS buying around 1.2695 helped rally back over 1.2700. Middle East names also seen buying around same time. Choppy trade within relatively narrow range.

Cable down at 1.5520 from early 1.5555. We’ve been as high as 1.5588, but sterling bulls have been unable to take out well reported sell orders up at 1.5580/00. A well known US forex hedge fund out of Long Island is reported to have been notable seller around the highs.

USD/JPY marginally easier at 84.55 from early 84.75. Danish bank, who has been notable buyer in recent days, again seen buying. This helped limit slippage. Lots more Japanese rhetoric, which is just getting plain irritating now.