- Bank of England leaves rates, QE unchanged
- Bank of Korea may have bought around $500 mln to curb won’s strength – Dealers
- US. 2-year note yield falls to record low of 0.375%
- Japan vice FinMin Sakurai: Market sets fx rates
- Japan FinMin Noda: No change in Japan stance to take decisive steps as needed in forex
- Japan EconMin Kaieda: Watching forex markets closely
- France CGT union calls for unlimited strike in energy sector as of Oct 12 over pension reform
- Move to delay UK spending cuts – FT
- UK Halifax house price index -3.6% m/m. Biggest fall since records began in 1983
- UK August industrial output +0.3% m/m, +4.2% y/y, better than median forecasts +0.2%, +4.1% respectively. Biggest y/y rise since December 1994
- French August trade balance -4.93 bln, worse than median forecast -4.0 bln
- Yuan undervaluation is source of mounting tension in world economy – IMF’s Strauss Kahn
- German August industry output +1.7% m/m. Demonstrably stronger than median forecast of +0.5%
US dollar has seen across the board losses, albeit fractional against the Canadian loonie.
EUR/USD up at 1.3990 from early 1.3920. We’ve been as high as 1.3997, but so far robust protection of well-touted 1.4000 barrier option interest has capped gains. China was a notable seller into the rally.
USD/JPY down at 82.30 from early 82.90, having been as low as 82.25, as BOJ continues to stay away and US yields continue to move lower. Comment from Japanese FinMin Sakurai, that market sets forex rates, accelerated the sell-off. Sometimes it’s just better to say nothing.
Cable up at 1.6005 from early 1.5870. The gains come despite very poor Halifax house price data and article in FT entitled “Move to delay UK spending cuts.” Better than expected output data helped, but a large chunk of the gains came post BOE announcement.
Seems a fair portion of the market had been expecting possible increase in QE and what we saw was a robust relief rally when the Old Lady stayed put.
