• China ForMin says “inappropriate” for Premier Wen to meet Japanese PM at UN meeting in New York. China-Japan relations already damaged over detained ship captain dispute
  • Japan bank lobby head: Japan’s fx intervention was effective
  • UK August PSNB 15.302 bln, worse than median forecast of 12.51 bln. Record high for an August. ONS says deterioration in the public finances mainly due to higher interest payments on gilts as a result of rise in RPI index
  • UK Treasury says higher than expected August PNSB figures demonstrate need to tackle deficit
  • Ireland sells 500 mln euros of 2014 bond, 1 bln euros of 2018 bond. Got 2.541 bln bids for 2014 bond. 2.929 bln bids for 2018 bond. Good result.
  • Ireland’s NTMA says investor demand has remained firm even in current difficult market conditions
  • Irish 5 year cds at 425 bps, 13 bps tighter (lower) on day

Sterling has had difficult morning, cable down at 1.5510 from early 1.5575, EUR/GBP up at .8465 from early .8400. The weakness is even more marked against generally strong swiss franc,

GBP/CHF down at 1.5540 from early 1.5685. One particular Swiss bank has been seen ongoing aggressive seller of the cross today. Whether it’s anything to do with M&A flows mentioned yesterday don’t really know. Could be.

Release of weak PSNB data for August has certainly weighed on sterling. Ongoing Asian central bank purchases of cable have lent some much needed support, but haven’t fostered meaningful, lasting rally. Stops now seen through 1.5480 and more through 1.5440.

EUR/USD up on the day at 1.3130 from early 1.3090, having been as high as 1.3150. It’s not been a direct route, the pairing initially coming under pressure as big German name sold around 1.3100.

Decent Spanish, Greek and most importantly Irish bond auctions have lent support. Stops now seen through 1.3155.

USD/JPY little changed on day, presently at 85.45 from early 84.55. Pairing came under some early pressure as yen bulls probed for signs of official interest. Didn’t get reports of any.

We got as low as 85.28 before recovery, with reports Danish bank buying decent amounts. The bank in question has been ongoing buyer of the pairing in recent weeks, speculation having it on behalf of well known Hungarian .

Japanese names were however seen sellers up around 85.60, probably for Japanese exporters.