• China’s passenger car sales rose 59.3% y/y in August, marked improvement from the 15.4% y/y rise seen in July
  • Departing White House economist Romer: US budget deficit cannot be excuse for leaving unemployed to suffer. US has tools that would bring unemployment rate down, must find will to use them
  • Currency trading growth slowed amid crisis, BIS says
  • German July retail sales -0.3% m/m, +0.8% y/y, weaker than median forecasts of +0.5%, +1.4% respectively
  • Swiss PMI for August 61.4, demonstrably weaker than median forecast of 66.0
  • Euro zone final manufacturing PMI for August 55.1, fractionally up from flash 55.0, but down from 56.7 in July and lowest read since February
  • UK manufacturing PMI for August 54.3, demonstrably weaker than median forecast of 57.0. Lowest read since last November
  • Spanish/German 10 year govt bond spread narrows to 177 bps from 186 bps at Tuesday settlement. Italian/German 10 year govt bond spread narrows to 158 bps from 165 bps at Tuesday settlement
  • German FinMin: Sees little sign of higher interest rates in foreseeable future. Greece deserves respect for its efforts on budget consolidation

EUR/USD started around 1.2700 and made an orderly ascent in early trade. The overnight release of good Australian Q2 GDP and Chinese August PMI data had set the tone. The momentum increased as European stocks extended their gains, and stops through 1.2750 and 1.2780 were triggered on way to session high 1.2812.

Middle Eastern selling, probably including sovereign interest, has been noted above 1.2800.

Cable at 1.5380 effectively unchanged on the day. Early rally floundered after running into well noted sell orders up at 1.5415/25. The release of demonstrably weaker UK manufacturing PMI has served to inhibit cable gains, despite the generally better risk sentiment which would usually lift the pairing.

EUR/GBP UP AT .8316 from early .8255, with major Swiss commercial bank notable buyer of the cross after the weak PMI data.

EUR/CHF up at 1.2972 from early 1.2900, underpinned by the better risk sentiment, swissy losing a little of it’s safe haven premium.

USD/JPY down at 84.00 from early 84.35, garnering absolutely no support from the better risk environment. A touch worrying. Well not if you’re short I guess.

AUD/USD up at .9055 from early .8975, underpinned by better risk sentiment. Stops tripped through .9040 on way to .9061 session high. More stops noted through .9080.