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• Goldman sees aussie trade of the century
• Bk Of Spain Chief economist: Sees Spanish current account balanced next year
• ESM chief Regling: Spanish bond yields have fallen, so Spain is not currently disposed to seeking a bailout – Paper
• ITALY DATA: August SA industrial output +1.7% m/m,…
• Japan ESP Poll: Economists Revise Down GDP Forecasts Further
• Italy August industry output +1.7% m/m, wda -5.2% y/y
• EUR/CHF supported at 1.2100
• BIS seen on offer in EUR/USD
• BOE Offers Unltd Usd In 7-day Repo At 0.65%., 84-Day at 0.64%
• ECB Weidmann:Turbulent Times Risk Overburdening Central Banks
• FRANCE DATA: August industry output +1.5% m/m; July..
• French August Industrial output rises 1.5% m/m
• Today’s orderboard
• European stocks set to open weaker
• ECB’s Constancio: Europe’s progress on integration, ECB’s OMT plan should offer encouragement for world economy
• GERMANY DATA: September WPI +1.3% m/m, +4.2% y/y;….
• ECB Noyer: First Must Improve Rate Transition Mechanism
• AUD’s got that kevlar jacket on again
• EUR/USD poll-time!!
• Fitch: US fiscal cliff, EU crisis, potential China hard landing major risks to global economy

Goldman sees aussie trade of the century Posted: 10 Oct 2012 01:57 AM PDT Pete thinks the analyst is talking (and I quote) “out of his bottom” Thanks to Siva for the heads up.

Bk Of Spain Chief economist: Sees Spanish current account balanced next year Posted: 10 Oct 2012 01:50 AM PDT Malo de Molina  says doubts on Spain driving out financing Spain adjustment proving slow, faces risks Oil price spikes threaten Spain adjustment Spain government growth forecast is optimistic Bloomberg headlines

ESM chief Regling: Spanish bond yields have fallen, so Spain is not currently disposed to seeking a bailout – Paper Posted: 10 Oct 2012 01:41 AM PDT Reuters reporting. The paper is Die Zeit. Does not believe a new debt restructuring is urgently needed for Greece In terms of budget consolidation and regaining competitiveness we are at least “half way down the road”

ITALY DATA: August SA industrial output +1.7% m/m,… Posted: 10 Oct 2012 01:10 AM PDT ITALY DATA: August SA industrial output +1.7% m/m, WDA -5.2% y/y, posting the best m/m gain since January 2010 as output grew across all sectors except for intermediate good, ISTAT said. –Jun-Aug 3-month moving average -0.7% vs the previous three months –There were 22 working days in August 2012, the same as in Aug 2011

Japan ESP Poll: Economists Revise Down GDP Forecasts Further Posted: 10 Oct 2012 01:10 AM PDT – See Separate Tables for Details TOKYO (MNI) – Economists have revised down their GDP and CPI forecasts further for both fiscal 2012 and 2013, and project near-zero economic growth in fiscal 2014, the latest monthly survey by the Japan Center for Economic Research released on Wednesday showed. The organization polled 40 economists and research institutes from Sept. 25 to Oct. 2 for its ESP Forecast Survey, and 40 answered on the growth and inflation outlook and 39 on the BOJ’s monetary policy stance. The previous survey was conducted from Aug. 27 to Sept. 3. In the near term, economists expect GDP for the July-September quarter of 2012 (data due out on Nov. 12) to post an annualized 0.31% drop, revised down sharply from their previous average forecast for a 1.47% rise. That would be the first drop in five quarters after +0.7% in Q2 and +5.3 in Q1 as the global slowdown and fading effects of fiscal stimulus are hurting exports and production. Japan’s economy last contracted by 1.3% in April-June 2011 and tumbled 7.9% in the previous quarter hit by the earthquake disaster. The latest ESP forecast showed that the average economist forecast for Q4 GDP was also revised down further to +0.37% from +0.62% in the previous survey. As for fiscal 2012 ending March 31, 2013, economists on average forecast GDP will grow 1.71%, revised down from +2.08% forecast in the previous survey. Economists on average project a 1.54% rise in GDP in fiscal 2013, revised down slightly from +1.62% projected the previous month. In their first forecast for fiscal 2014, economists see only a 0.32% rise in GDP. The survey showed that the average forecast for core CPI (excluding perishables) in fiscal 2012 was -0.08% y/y, revised down from -0.06% forecast in the previous survey. Economists on average expect core consumer prices to show a 0.11% rise in fiscal 2013, down from +0.14% predicted the previous month. This would still be the first y/y gain since +1.2% in fiscal 2008. They forecast that the core inflation reading will mark a sharp 2.38% increase in fiscal 2014, thanks to a planned hike in the 5% sales tax to 8% in April 2014. The survey also showed that 29 economists predict further monetary easing by the Bank of Japan in coming months, mostly in October or December, up slightly from 28 last month. Meanwhile, 10 economists expect the BOJ to start unwinding its monetary easing, mostly in about a year ahead, unchanged from the previous survey. tokyo@mni-news.com ** MNI Tokyo Newsroom: 81-3-6860-4820 ** [TOPICS: M$J$$$,M$A$$$,MAJDS$,MMJBJ$]

Italy August industry output +1.7% m/m, wda -5.2% y/y Posted: 10 Oct 2012 01:02 AM PDT Demonstrably stronger than Reuter’s median forecasts of -0.4%, -10.1% respectively.

EUR/CHF supported at 1.2100 Posted: 10 Oct 2012 12:55 AM PDT I’m being told there’s a large bid sitting on the EBS at 1.2101 in the cross, which i can only imagine may be official related. The cross is back down some 40 pips after yesterday spike in Asia to  1.2144 following the announcement that custodials State Street and BNY Mellon plan to charge depositors on swiss francs. EUR/CHF sits at 1.2105

BIS seen on offer in EUR/USD Posted: 10 Oct 2012 12:25 AM PDT Sorry bout that, got a bit muddled. They’ve been seen on the offer in the mid 1.2870′s. We’re at 1.2877, so no damage done. Talk of some trailing buy stops through 1.2885.

BOE Offers Unltd Usd In 7-day Repo At 0.65%., 84-Day at 0.64% Posted: 10 Oct 2012 12:20 AM PDT LONDON ((MNI) – The Bank Of England said Wednesday it was offering an unlimited supply of U.S. dollars in both 7-day and 84-day repo operation. The settlement date on the 7-day op was Oct 18 maturing Sept 27 2012. The Bank said the repo would be at a fixed-rate, with the rate to be set at 0.65%. The settlement date on the 84-day op was Oct 18 maturing Jan 3 2013. The Bank said the repo would be at a fixed-rate, with the rate to be set at 0.64%. –London Bureau; Tel: +442076341655; email: ukeditorial@marketnews.com [TOPICS: M$B$$$,M$$BE$]

ECB Weidmann:Turbulent Times Risk Overburdening Central Banks Posted: 10 Oct 2012 12:10 AM PDT FRANKFURT (MNI) – Crises risk putting too many responsibilities and burdens on central banks, which must guard against efforts to loosen their mandates in difficult times, European Central Bank Governing Council member Jens Weidmann said Wednesday. “The expectations for a central bank increase especially in turbulent times, and therein lies the danger of overburdening,” Weidmann, who heads the Bundesbank, said in prepared remarks at a cash symposium hosted by his institution here. Weidmann said “the euro is a stable currency,” in part because the independence and price stability goals of monetary policy have not been questioned. But he warned in this context: “The crisis calls for the courage to change as well as the courage to maintain what has been proven and to guard against co-optation or weakening.” “A currency can only be stable if the public has trust in the abilities of central banks and see their determination to maintain price stability. This confidence was won by central banks over the past decades and is their most valuable capital,” Weidmann said. Weidmann, who has opposed the ECB’s bond-buying program unveiled last month, said price stability was “rightly” the overriding goal of European monetary policy. Though he did not refer to the bond-buy program, Weidmann noted that the Maastricht Treaty had “clear rules” that specifically made price stability the ECB’s primary goal and prohibited monetary financing of governments. Weidmann warned that central banks that are not independent of states “lack the confidence that it will at all times give priority to guaranteeing price stability.” – Frankfurt bureau: +49 69 720 142; email: ccermak@mni-news.com [TOPICS: M$X$$$,M$$EC$,MGX$$$,MT$$$$,M$$CR$,M$G$$$]

FRANCE DATA: August industry output +1.5% m/m; July.. Posted: 09 Oct 2012 11:50 PM PDT FRANCE DATA: August industry output +1.5% m/m; July +0.6% m/m (+0.2%) – Above expected; MNI analysts survey median forecast -0.2% m/m – July-August industry output +0.7% vs 2Q average; 2Q -0.3% q/q – August mfg output +1.8% m/m after July +1.0% m/m (+0.9%) – Please see MNI Mainwire for further details

French August Industrial output rises 1.5% m/m Posted: 09 Oct 2012 11:48 PM PDT Well above forecasts of -0.2/flat (Reuters/DJ), and an upward revision of +o.6%  in July MFG output  rose 1.8% m/min August from an upward revision of  1.0% in July

Today’s orderboard Posted: 09 Oct 2012 11:38 PM PDT EUR/USD:   Bids 1.2820/30(200 day MA 1.2822) sell stops below and through  1.2800 ahead of bids tech supp 1.2750/60 (lows  10/11 Sept). Offers 1.2880/00 and 1.2930/40 GBP/USD:   Bids 1.5975/85 and 1.5850/60 (Asian sovereigns). Sell stops below ahead of tech support 1.5910/15 (1.5914 – 55 day MA). Sell stops again through 1.5900. Offers 1.6000/10 and 1.6040/50 EUR/GBP:  Bids 0.8030/40 and 0.8000/10. Offers 0.8050/60 and 0.8090/00, possible buy stops just above ahead of 200 day MA at 0.8118., USD/JPY: Bids 78.00/10 (real money, semi official, Swiss names), sell stops below through 77.90. more bids below 77.50/60. Offers 78.40/50 (55 day MA 78.41) buy stops through 78.65 ahead of offers 78.80 up to 79.00 (78.79- 100 day MA), and buy stops through 79.10. More buy stops through 200 day MA at 79.36. EUR/JPY: Offers/tech res 100.80/00(100.91 kijun line) and 101.40/50. Bids 100.40/50 larger at 100.00/10 with sell stops below AUD/JPY: Bids 79.75/85 and 79.40/50 sell stops below, offers 80.00/05 and 80.25/30 (Japanese banks) ahead of tech res 80.75/80 (80.78- 100 day MA) and 81.00/10 AUD/USD: Weak sell stops through 1.0200 ahead of bids 1.0180/90. Sell stops below ahead of bids 1.0150/60 (barrier 1.0150) with further sell stops on a break.  Offers 1.0240/50 (real money, also 100 day MA 1.0258) buy stops above ahead of more offers 1.0265/75,  and further buy stops just above. EUR/AUD: Bids 1.2570/80 (1.2577- 50% fibo  Sept 27-Oct 7 rally) and tech supp 1.2650/55 ahead of 1.2510/20 (61.8% fibo  1.2518). Offers/tech res  1.2615/25 and 1.2665/75 EUR/CHF : Bids 1.2080/00 sell stops just below, Offers 1.2130/50

European stocks set to open weaker Posted: 09 Oct 2012 11:21 PM PDT Financial bookies see FTSE and DAX  down around -0.4%, CAC 40 down around -0.5%.

ECB’s Constancio: Europe’s progress on integration, ECB’s OMT plan should offer encouragement for world economy Posted: 09 Oct 2012 11:12 PM PDT Key message is that Europe now has rules to deal with sovereign debt crisis EUR/USD sits at 1.2863,  marginally firmer than the 1.2855 which greeted me. Buy orders clustered 1.2820/30 (200 dma at 1.2822), sell stops below there and more through 1.2800.

GERMANY DATA: September WPI +1.3% m/m, +4.2% y/y;…. Posted: 09 Oct 2012 11:10 PM PDT GERMANY DATA: September WPI +1.3% m/m, +4.2% y/y; August +3.1% y/y – Germany September WPI: solid fuels/oil products +5.4% m/m – Germany September WPI: ore/iron/steel/non-ferrous metals unch m/m – Germany September WPI: grains/seeds/feed +0.6% m/m – Germany September WPI: fruits/vegetables/potatoes +1.9% m/m – Germany September WPI: data processing/communication -0.2% m/m – Germany September WPI: food/beverages/tobacco +0.8% m/m – Germany September WPI: household electrical items/TV/radio +0.2% m/m – Please see MNI Mainwire for further details

ECB Noyer: First Must Improve Rate Transition Mechanism Posted: 09 Oct 2012 11:00 PM PDT TOKYO (MNI) – European Central Bank Governing Council member Christian Noyer on Wednesday said the ECB must first improve the transition mechanism so lower policy interest rates will filter through to borrowing costs for businesses and households. Asked if there’s any urgency to help Spain out of its fiscal problems, Noyer told reporters that it is not his major concern as to whether the eurozone’s key policy rates should be changed at this point. After the last ECB rate cut, lending rates actually rose, he told the Foreign Correspondents’ Club of Japan. “For us, the major problem is first fix the transition problem. Once we fix the transition problem, we shall see if interest rates are problems,” he said. In his speech to the club, Noyer said efforts to move out of the European debt crisis take time, first to be implemented and then to yield their effects. “Doubts and delays create nervousness, volatility and worry in financial markets, which often gives rise to sharp rises in interest rates for countries deemed to be vulnerable,” he said. “The key interest rates that we set no longer feed through to the real economy in the same way in all countries via the bank lending channel — which is a crucial channel in the euro area given the predominance of intermediated financing.” In the question and answer session, Noyer urged governments to try to boost economic growth by implementing structural reforms and raising competitiveness amid signs of a further global slowdown. “In my view, government must act to boot growth… mainly aim at boosting growth potential through structural reforms,” he said. “If you just try to boost growth by quick spending, (its effects) may not last long.” In his speech, Noyer warned that despite some bright signs in the eurozone gripped by the sovereign debt, there remain challenges. “There are a number of positive signs: bond market activity is reasonably buoyant, yields of peripheral countries have declined slightly and stock markets have picked up,” he said. But he added: “Financial markets are highly fragmented within the euro area and sovereign yield spreads remain substantial. “Growth is weak and, here too, there are major disparities within the euro area. In the second quarter, growth stood at -0.2% for the area, after stagnating in the first quarter.” He continued, “Germany posted the highest growth, at 0.3%, and Portugal the weakest, at -1.2%. We are still expecting growth to recover very gradually next year.” As for the European Stability Mechanism that was established on Monday, Noyer said, “It will also be able to directly lend money to banks in difficulty without increasing the debt of their home countries as soon as the single supervisory mechanism will be in place.” “It is a powerful crisis resolution tool that Europe has equipped itself with; adding to already disbursed bilateral and EFFS loans and to the existing EU facility, the total firepower will near $1 trillion,” he said. tkeditorial@marketnews.com ** MNI Tokyo Newsroom: 81-3-5403-4833 ** [TOPICS: M$X$$$,M$$EC$,MGX$$$,M$G$$$,M$$CR$]

AUD’s got that kevlar jacket on again Posted: 09 Oct 2012 10:40 PM PDT This week’s seen a steady sell off in the EUR/AUD from highs around 1.2826 and we’ve just broken down through the 50% fibonacci level of the Sept 27 – Oct 7  rally around  1.2577.  This move has the potential to track down now through  the Sept 18 highs around  1.2553 with next fibonacci support at the 61.8% level around 1.2518. AUD/USD meanwhile’s enjoying the move, sitting around 1.0220 but faces some stern resistance up towards 1.0250 (Japanese funds, US names and RBA commercial int) with likely buy stops just above, and tech res at 1.0275 with the 100 day MA sitting between at 1.0258. A break above here targets the more important 1.0320/30 level and the 200 day MA at 1.0344. AUD/USD’s sitting around 1.0220 with the cross on the fibo level at 1.2577

EUR/USD poll-time!! Posted: 09 Oct 2012 10:39 PM PDT With the lower 1.2900 parameter of the recent 1.2900-1.3100 poll having given out yesterday, it’s time for another poll. We sit at 1.2855. What’ll we see first, 1.2750 or 1.2950? Reason/s for choice always welcome, but not obligatory.

Fitch: US fiscal cliff, EU crisis, potential China hard landing major risks to global economy Posted: 09 Oct 2012 10:18 PM PDT Yep, think we knew that already…….. ECB commitment reduces downward pressures in some countries Emerging markets resilient but not immune to global slowdown

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