- UK Q2 GDP -0.7% q/q, -0.8% y/y, demonstrably weaker than median forecasts of -0.2%, -0.3% respectively
- ONS says extra public holiday, poor weather hurt Q2 GDP and led to “additional uncertainty” in calculating GDP during June (what a crock)
- UK’s Osborne: One-off factors are not an excuse for weak GDP (got that right pumpkin, pull your finger out!!)
- ECB’s Nowotny sees arguements for giving ESM a banking license - Bloomberg TV
- German July Ifo business climate 103.3, weaker than median forecast of 104.5
- Ifo economist Wohlrabe: Uncertainty has risen further and will increase further in next months
- Spain’s lottery seeks 6 bln euro syndicated loan for government fund to ease regions finances – Bankers
- EU Commission: Troika will travel to Greece again in September and only then finalise its assessment of bailout programme
- German govt spokesman says German govt doesn’t share view that euro zone is on brink of disaster
- BOJ’s Dep Gov Yamaguchi: Will ease again if yen rise severely threatens Japan’s recovery path
- Dutch July business confidence -5.2 pts after -4.8 pts in June
- Italy July consumer confidence rsies to 86.5 from 85.4 in June, better than median forecast of 85.0
- Europe is sleepwalking towards imminent disaster, warn top economists - AEP at The Telegraph
- Spain to avoid a full fledged bailout this year - HSBC
The single currency has finally managed a recovery, albeit from some sorry low levels. EUR/USD up at 1.2145 from early 1.2075, having been as high as 1.2154. Everything was relatively calm when comment from ECB’s Nowotny (made in Bloomberg TV interview) hit the wires (see above)
This saw EUR/USD spike above 1.2100 into the 1.21 teens. On closer inspection the comments as a whole didn’t have the same impact as the one headline. Whilst the official said he saw arguements for giving the ESM a banking license, he admitted that he is “not aware of specific discussions within the ECB at this point”
We slipped back below 1.2100 as ACB, macro funds sold. We sat around 1.2085/90 on the release of disappointing German Ifo data. On any other day this probably would have been good for a semi-decent EUR/USD sell-off, but not today. There was no discernible sell-off and already jittery euro bears took this as the signal to start trimming euro shorts.
Cable effectively unchanged at 1.5505. But EUR/GBP has seen a decent rally, up at .7830 from early .7783. The bulk of the move took place straight after the release of truly horrible UK Q2 GDP data.
USD/JPY unchanged at 78.20. Buy orders seen 78.00/10, sell stops through 77.90. Sell orders clustered 78.40/60, buy stops above there.