• Senior lawmaker: German parliament to support Bundesbank funds for IMF – Dow Jones reports
  • ECB’s Coeure: If needed, ECB may have to boost bond purchases. Must act without political interference
  • Greece, private bondholders’ talks in Athens end without a deal. Consultations to continue – Banker involved in talks. Reuters reports
  • German December ZEW economic sentiment -53.8, better than median forecast of -55.8
  • Bank of England’s Dale: Certainly scope if needed for BOE to increase QE, long-dated yields still have room to fall
  • EU’s Van Rompuy: Will review in March overall adequacy of EFSF, ESM ceiling of 500 bln. Optimistic that by early March at latest fiscal compact treaty will be signed
  • ECB seen buying Italian bonds
  • French November EU harmonised CPI +0.3% m/m, +2.7% y/y, stronger than median forecasts +0.1%, +2.5% respectively
  • UK November CPI +0.2% m/m, +4.8% y/y, in line with median forecasts
  • Swiss govt: 2012 growth seen +0.5%, down from previous forecast +0.9%
  • QE might not work, BIS tells Bank of England – The Telegraph

This morning had a real end of year feel to it. Maybe it was because a number of our sources were salivating at the thought of pending Christmas lunches (lucky chaps)

EUR/USD effectively unchanged on the day at 1.3195. Russia notable seller early, but we didn’t get very far. Real money profit-taking on recent short possies helped cushion the sell-off and we settled into a very uninspired narrow range trade.

That’s until Dow Jones reported news that German parliament ready to support Bundesbank funds for the IMF. From below 1.3200 we spiked higher, tripping buy stops through 1.3225 on the way to session high 1.3236. Major US commercial bank notable buyer during this rally.

We then drifted back lower amid reports of decent sell orders lined up at 1.3245/50. The sell-off accelerated on the news Greece, private bondholders’ talks in Athens have ended without a deal.

Cable and USD/JPY effectively unchanged at 1.5600 and 77.85 respectively.

All in all a session best forgottten.

Roll on Christmas.