• Portugal main opposition leader: Doesn’t feel obliged to pass any budget. Awaiting govt budget proposal, will decide then
  • Euro zone September economic sentiment rises to 103.2 from 102.3 in August, stronger than median forecast of 101.2
  • French September consumer confidence rises to -35 from -38 in August, stronger than median forecast of -39
  • Italian September business confidence 98.4, down from 99.3 in August, weaker than median forecast of 100.1
  • Italy govt revises 2010 GDP forecast to 1.2% from 1.0%, but cuts 2011 forecast to 1.3% from 1.5%. Sees 2012 GDP at around 2.0%
  • UK mortgage approvals 47,372, down from 48,346 in July, but pretty much in line with median forecast 47,000. Weakest since February
  • Swiss KOF leading growth indicator 2.21 in September, slightly below upwardly revised 2.22 in August, but better than median forecast of 2.12. Not as good as rumoured 2.40 though
  • ECB’s Constancio: Doesn’t see currency war at present
  • China Central Bank: Reaffirms appropriately loose monetary policy. Will increase yuan’s flexibility
  • US Treasury’s Brainard: Would like to see more flexibility in China’s foreign exchange rate
  • S&P cuts Anglo Irish Bank lower tier 2 debt to CCC from B

EUR/USD up marginally at 1.3610 from early 1.3595, but off session high 1.3638. Very quiet start popped into life when BIS came in buying. Barrier interest at 1.3600 gave out easily and stops above 1.3610 tripped. BIS then sold around 1.3620 but this didn’t stop us getting to 1.3638 session high.

Medium-term model funds were seen selling around the highs. Talk was these funds had been notable buyers down around 1.2900, so some lucrative profit taking.

Interest has also been noted to buy EUR/USD puts with strikes around 1.3500 for 2-3 week expiries.

Cable down at 1.5800 from early 1.5830. Early rally capped at 1.5874 with decent UK corporate selling noted.

EUR/GBP has moved higher, presently at .8615 from early .8590 and this has weighed on cable. US invesmtent house notable buyer of the cross today. Also talk Buba has 2 yards of the cross to buy before close tomorrow, for month-end purposes. This is in stark contrast to all the talk heard last week of large sell order to go through this week.

USD/JPY hardly changed at 83.63. Talk of barrier interest at 83.50 with 83.51 session low posted. No sign of BOJ as yet. Japanese exporters seem to be chasing the pairing lower. Talk now of sell orders up around 84.00. Had been 84.50 yesterday.

AUD/USD up at .9710 from early .9685. Talk of barrier interest up at .9750 and 9800 now.