• Merkel: Strengthening EMU will be central theme at EU summit
  • OECD Secretary General : Calls for ‘aggressive action’ by ECB to resolve debt crisis
  • Merkel, Sarkozy to give press statement after meeting in Paris Monday
  • German govt spokesman: Merkel found German FinMins’ proposal on redemption funds very interesting
  • German FinMin spokesman: Redemption fund would show symbolically countries understand high debts are problem of euro zone
  • Austrian FinMin: Asked about redemption fund idea, says any solution involving more txpayer money could have problems in national parliaments
  • Periphery/German govt bond spreads narrow
  • UBS lowers Swiss growth forecasts
  • UK November construction PMI 52.3, down from 53.9 in October but fractionally better than median forecast of 52.0
  • Euro zone October producer prices +0.1% m/m, +5.5% y/y, pretty much in line with median forecasts of +0.2%, +5.55 respectively
  • Canadian November employment -18.6k, worse than median forecast of +19.1k. Unemployment rate rises to 7.4% from 7.3% in October
  • China Foreign Minister: Cannot use forex reserves to rescue foreign countries
  • Soros: World financial system on brink of collapse

Rumour that non farm payrolls are going to come in at +200k (median forecasts 120k) has helped give risk sentiment a decent boost.

EUR/USD up at 1.3528 from early 1.3460 having been as high as 1.3538 (EBS) or 1.3535 (Reuters) so far.

The pairing ticked a touch higher in early trade, but selling by BIS (around 1.3470) and ACB (around 1.3480) helped slow progress. We heard the rumour when the pairing was sitting at a comatose 1.3480, but as it circulated so the pairing started to move higher. Slowly at first and then catching fire.

Obviously solid gains by European stocks and narrowing periphery/German govt bond spreads early had lent the single currency underpinning, but it wasn’t till the rumour that we got up a real head of steam.

Cable up at 1.5705 from early 1.5675, underpinned by risk on environment. EUR/GBP up at .8615 from early .8585, buy stops tripped through .8600.

AUD/USD up at 1.0285 from early 1.0220 as one would expect against risk on backdrop.