- Japanese PM Kan wins leadership vote
- ZEW institute September German economic sentiment -4.3, down from 14.0 in August and much weaker than median forecast of 10
- Euro zone July industrial production flat m/m, +7.1% y/y, weaker than median forecasts of +0.2%, +8.0% respectively
- UK August CPI +0.5% m/m, +3.1% y/y, stronger than median forecast +0.3%, +2.9% respectively
- BOE’s Weale: Would not describe myself as hawk or dove
- Greece sells 1.17 bln euros of 26-week t-bills, including 270 mln in non-competitive bids
- German FinMin Schaeuble: Net new borrowing this year somewhere between 50 and 60 bln
Euro has given ground, knocked back by weaker than expected ZEW survey and to a lesser extent weaker than expected euro zone industrial production data.
EUR/USD down at 1.2837 from early 1.2880. EUR/JPY down at 106.85 from early 107.35, while EUR/GBP down at .8335 from early .8360.
EUR/USD rallied initially and made it to session high 1.2912 with hedge fund and Asian sovereign buying noticeable. However the pairing was soon on the defensive, as reports circulated of Swiss National Bank selling interest above 1.2910.
The sell-off gathered pace on the release of the weak ZEW survey and we’ve been as low as 1.2830. Talk of buy orders clustered at 1.2820/40, including Asian sovereign interest, has lent much needed support.
BIS has been noted selling EUR/USD in late morning trade down around 1.2840, helping curtail any meaningful recovery so far. Sell stops seen through 1.2820.
USD/JPY down at 83.20, marginally easier from early 83.35. We’ve been as low as 83.08 in wake of news that PM Kan had won leadership race. Buy orders defending noted 83.00 barrier option interest have so far held downside. UK clearer notable buyer around the lows.
Cable at 1.5405, all but unchanged from early 1.5400. Asian sovereign seen buying cable early helping it get to session high 1.5442 where it ran into ready sellers. Vulnerable looking housing market and risk of heightened civil disobedience in wake of austerity measures couple of negatives for sterling to deal with.
USD/CHF very marginally firmer at 1.0035 from early 1.0020, having at one stage dipped fleetingly below the psychological parity level on EBS.