Your forexlive.com ENewsletter

---

• EU official: No need for Spain to apply for aid program
• EU official: Spain ESM bid ‘not imminent if it were to come’
• More from Latorre … Talking to EU institutions about a bailout
• Real glad I bothered turning up
• One more push!!!
• Spain Dep Econ Min Latorre: Spain’s sticking to 2013 growth forecast
• BOJ Gov Shirakawa: Japan’s economy is leveling off
• Today’s orderboard
• Clarify: Samaras: Greece Coffers Empty By End-November: Press
• Swiss National Banks’ September forex reserves 429.3 bln
• Spain August calender-adjusted industrial output -3.2% y/y
• Samaras: Greece’s Coffers Will Be Empty By November: Press
• EUR/USD poll-time!!
• Hurry!! Hurry!!
• Analysis: UK Osborne Faces Key Tests To Keep Gilts’ Allure – 2
• Analysis: UK Osborne Faces Key Tests To Keep Gilts’ Allure – 1
• IMF Cuts Global Grwth Forecast To 3.3% 2012; 3.6% 2013: Press
• IMF lowers global growth forecasts to 3.3% in 2012
• What a little belter……
• Morgan Stanley chief warns on Wall St pay

EU official: No need for Spain to apply for aid program Posted: 05 Oct 2012 01:38 AM PDT Spanish market conditions are much improved Spain still faces challenges to meet agreed targets No application received from Spain for credit enhancements US election has no great impact on EU aid

EU official: Spain ESM bid ‘not imminent if it were to come’ Posted: 05 Oct 2012 01:36 AM PDT Eurogroup will discuss Spain’s reforms next week and assess implementation Spain is very much fulfilling EU recommendations No Spanish request for additional bailout On Greece: No conflict within ‘troika’ on the Greek program No decision on Greek aid payment at October summit… ‘considerably too early’ ( Greece won’t like that)

More from Latorre … Talking to EU institutions about a bailout Posted: 05 Oct 2012 01:18 AM PDT Spain’s analyzing its options Interest rate distortions should be corrected quickly ECB recognizes sovereign bond yield distortions No reason for Spain to miss its deficit targets

Real glad I bothered turning up Posted: 05 Oct 2012 01:10 AM PDT EUR/USD sits at 1.3005 in really sloooooooooooooooooooow trade. Anyone would think there was important data coming out later. We saw a brief dip below 1.3000 earlier which got as low as 1.2994. Talk is a US custody bank was notable buyer below 1.3000. I guess they heard Perfect Pete’s latest poll forecast

One more push!!! Posted: 05 Oct 2012 01:04 AM PDT Thanks to all those kind souls who have donated to Forexlive’s favourite charity, it’s very much appreciated. If you haven’t, please think about doing so. We’d be real chuffed if you did. The MDSC Buddy Walk is this weekend, so time is fast running out. Please use this link if you’d like to make a donation. Thank you.

Spain Dep Econ Min Latorre: Spain’s sticking to 2013 growth forecast Posted: 05 Oct 2012 12:59 AM PDT Spreads don’t correspond to Spain ‘s fundamentals, euro doubts penalizing Spanish bonds Budget assumptions are credible Slower growth wouldn’t threaten the country’s deficit goal 2012 budget measures yet to produce full impact Expects less energy driven inflation by November

BOJ Gov Shirakawa: Japan’s economy is leveling off Posted: 05 Oct 2012 12:36 AM PDT Will not link policy timing automatically to price outlook Reckless buying of JGB’s  could trigger sudden bond yield spike Understands Maehara’s views on monetary policy, government understand’s BOJ resolve to beat deflation Maehara’s attendance  was meaningful, BOJ and Government  are in close contact Cutting growth outlook meant lowering CPI forecast Strong Yen is a drag on the economy and worsens sentiment, Fx intervention  falls under the MOF’s jurisdiction Japan’s funding costs are lower than in the US Wants to discuss how to address global slowdown at the next G7 BOJ will decide policy on a long-term perspective and will conduct policy at an appropriate speed

Today’s orderboard Posted: 05 Oct 2012 12:12 AM PDT EUR/USD:  Tech res 1.3025/30 (1.3029- 61.8% fibo 1.3169-1.2802), offers above at 1.3040/50 likely buy stops above ahead of tech resistance up at 1.3085 (Sep 19 high). Bids 1.2980/00 sell stops below ahead of more bids 1.2950/60 GBP/USD:  Offers 1.6190/00 and tech res 1.6215/20 (1.6217- 61.8% fibo of 1.6310-1.6068) ahead of tech/offers 1.6265/75 (1.6273 Sep 28 high). Bids 1.6160/70 and 1.6130/40. EUR/GBP:  Bids 0.7995/00, tech supp 0.7962 (100 day MA) and 0.7940/45 (trend line supp), ahead of 0.7929- 55 day MA).  Offers and 0.8055/65 and 0.8090/00 ahead of 200 day MA  0.8120. USD/JPY: Bids from 78. 30/40 (78.40- 55 day MA) and down to 78.00 (real money, Kampo, Swiss names), possible  sell stops mixed in through 78.25, and  sell stops below through 78.00. Offers 78.70 trailing up to 79.00 (78.72 today's high, and 78.82- 100 day MA) , ahead of buy stops through 79.10  and through 200 day MA at 79.33 EUR/JPY: Bids 101.75/85 (101.75-200 day MA) and 101.45/55 ahead of 101.30/35 (101.31 yesterday's low) Offers and 102.. 30/40  (102.40 Sept 20 high) possible buy stops above. AUD/JPY: Sell stops through 80.20 ahead of bids 80.00/10, sell stops below ahead of bids/tech supp 79.65/75 (79.68 Sept 5 low, Oct 3 low 79.73). Offers/tech res 80.65/75 (Tech trendline res now at 80.69, and 80.73- 100 day MA) and 81.00/10 AUD/USD: Bids 1.0240/50 (1.0248- 200 day MA) and 1.0200/10, sell stops through 1.0180 ahead of tech supp 1.0165/75 (Sep 5 low 1.0166) and bids in front of a 1.0150 barrier.  Offers 1.0265/75 buy stops through 1.0280 ahead of offers/ tech res 1.0290/00 (1.0292 cloud base) EUR/AUD: Offers 1.2710/20 ahead of weekly cloud base at 1.2742. Bids now at 1.2665/75 sell stops through 1.2660 ahead of bids 1.2625/35 and 1.2580/90. Tech supp 1.2550/60  below (Tuesday's break out level)

Clarify: Samaras: Greece Coffers Empty By End-November: Press Posted: 05 Oct 2012 12:10 AM PDT –Clarifies That Samaras Stipulated Cash Would Run Out End Of November FRANKFURT (MNI) – Greece will run out of money at the end of next month if it does not receive the next aid tranche from its European creditors, Greek Prime Minister Antonis Samaras said in an interview with German business daily Handelsblatt, published Friday. Samaras said the European Central Bank should consider accepting lower interest payments on its holdings of Greek sovereign debt or rolling over its debt holdings to give Greece more time. He also suggested Greek banks could be recapitalized directly through the ESM. Samaras said that despite more pain ahead there were some signs of recovery in Greece. “They are there,” he told the paper, citing renewed inflows of bank deposits and an improved trade balance. Asked how long Greece can last without the next E31.5 billion aid tranche, Samaras replied: “until the end of November, then the coffers are empty.” Samaras resisted further cuts to pensions and wages being sought by the Troika – made up of the European Commission, the International Monetary Fund and the ECB – which has been in Athens negotiating terms for the next aid tranche’s release and aiming to close a budget gap of about 13.5 billion over the next two years. “That is very hard, because we are bleeding already. The cuts until now already go down to the bone. We are at the limits of what our people can accept,” Samaras said, arguing the spending Samaras reiterated that he is looking for “more time for fiscal consolidation, but not necessarily more aid.” He said the ECB could help by easing the terms on its sovereign debt holdings. “The ECB, which owns Greek government debt, could declare itself happy with lower interest on this paper. Or it could agree to a rollover when these bonds are due,” Samaras said. “I could also imagine the recapitalization of Greece’s banks, as is being considered for Spain, coming directly via the ESM and not added to government debt. That would represent a clear alleviation,” he said. ECB President Mario Draghi seemed to reject the idea Thursday, when he said that extending the maturities on the Greek bonds the ECB holds “would constitute monetary financing.” Samaras repeated that Greece is committed to remaining in the euro and “will keep its promises” in terms of repaying its debts. “There is no way back. the exit from he euro is not an option for Greece; it would be a catastrophe,” Samaras said. An exit, he said, “would be a much bigger setback – the costs greater than the reform policy.” – Frankfurt bureau: +49 69 720 142; email: ccermak@mni-news.com [TOPICS: M$G$$$,M$X$$$,MGX$$$,M$$CR$,M$Y$$$]

Swiss National Banks’ September forex reserves 429.3 bln Posted: 05 Oct 2012 12:08 AM PDT August data revised to 420.8 bln. Just think, it’s nearly a year ago that I sat on my little highchair at our New York gabfest and opined that I thought the SNB would be able to hold the EUR/CHF peg at 1.2000. That was in the days when I got things right Does my heart good to look at the screens and see the cross sitting proudly at 1.2115.

Spain August calender-adjusted industrial output -3.2% y/y Posted: 05 Oct 2012 12:01 AM PDT Betta than Reuters’ median forecast of -5.5%.

Samaras: Greece’s Coffers Will Be Empty By November: Press Posted: 05 Oct 2012 12:00 AM PDT FRANKFURT (MNI) – Greece will run out of money in November if it does not receive the next aid tranche from its European creditors, Greek Prime Minister Antonis Samaras said in an interview with German business daily Handelsblatt, published Friday. Samaras said the European Central Bank should consider accepting lower interest payments on its holdings of Greek sovereign debt or rolling over its debt holdings to give Greece more time. He also suggested Greek banks could be recapitalized directly through the ESM. Samaras said that despite more pain ahead there were some signs of recovery in Greece. “They are there,” he told the paper, citing renewed inflows of bank deposits and an improved trade balance. Asked how long Greece can last without the next E31.5 billion aid tranche, Samaras replied: “until November, then the coffers are empty.” Samaras resisted further cuts to pensions and wages being sought by the Troika – made up of the European Commission, the International Monetary Fund and the ECB – which has been in Athens negotiating terms for the next aid tranche’s release and aiming to close a budget gap of about 13.5 billion over the next two years. “That is very hard, because we are bleeding already. The cuts until now already go down to the bone. We are at the limits of what our people can accept,” Samaras said, arguing the spending Samaras reiterated that he is looking for “more time for fiscal consolidation, but not necessarily more aid.” He said the ECB could help by easing the terms on its sovereign debt holdings. “The ECB, which owns Greek government debt, could declare itself happy with lower interest on this paper. Or it could agree to a rollover when these bonds are due,” Samaras said. “I could also imagine the recapitalization of Greece’s banks, as is being considered for Spain, coming directly via the ESM and not added to government debt. That would represent a clear alleviation,” he said. ECB President Mario Draghi seemed to reject the idea Thursday, when he said that extending the maturities on the Greek bonds the ECB holds “would constitute monetary financing.” Samaras repeated that Greece is committed to remaining in the euro and “will keep its promises” in terms of repaying its debts. “There is no way back. the exit from he euro is not an option for Greece; it would be a catastrophe,” Samaras said. An exit, he said, “would be a much bigger setback – the costs greater than the reform policy.” – Frankfurt bureau: +49 69 720 142; email: ccermak@mni-news.com [TOPICS: M$G$$$,M$X$$$,MGX$$$,M$$CR$,M$Y$$$]

EUR/USD poll-time!! Posted: 04 Oct 2012 11:52 PM PDT Well we finally breached one of  the 1.2800-1.3000 parameters. The wrong one, but what can ya do We sit at 1.3008. What’ll we see first, 1.2900 or 1.3100? Is this just a fools’ rally, or has it got legs? Reason/s for choice always very much welcomed, but not obligatory.

Hurry!! Hurry!! Posted: 04 Oct 2012 11:48 PM PDT Time’s a wastin….. Want to enter our non-farm payrolls contest, then hit this link

Analysis: UK Osborne Faces Key Tests To Keep Gilts’ Allure – 2 Posted: 04 Oct 2012 11:30 PM PDT Gemma Tetlow of the Institute for Fiscal Studies sees December 5 as presenting more of an opportunity than a problem. The government’s net debt rule – under which public debt as a ratio of GDP must fall between 2014/15 and 2015/16 – was “never particularly sensible,” she notes, or constraining since the debt ratio doesn’t even need to be on a downward trajectory. “As a measure of debt sustainability, it just reflects a particular moment in time.” Osborne has “a number of options”, she says. The chancellor could rapidly replace the debt target with a new fiscal rule but it would be better to seek a “more soundly formulated rule for the longer term which might win cross-party support”. Senior UK Analyst at JP Morgan Malcolm Barr says Osborne would have to intensify fiscal tightening by around 25% in the current parliament (2010-15) to stay on track. “We don’t think he’ll do that. He’ll push the target back – everything encourages us to believe that is what he will do.” Barr urges Osborne to call on the Office for Budget Responsibility to set a new, robust fiscal rule for the longer term in order to minimise any loss of credibility in the markets. “An attempt to build something more durable would encourage investors,” he says. Something else to encourage gilt investors is that the BOE is widely expected to announce in November it will be buying another stg50bn of UK government bonds. Recent data have by and large left that expectation intact. That provides another nice little prop for gilts for the moment. But time could be running out on QE. Barr believes the BOE will announce more asset purchases in November, but after that he says the central bank is approaching a point where if the data flow shows incipient signs of growth then further QE expansion will be constrained. PIMCO’s Amey sees a real threat that potential changes to the linker market arising from the statistical review of the Retail Price Index could destabilise the gilt market. This is much more of a worry for him than any re-engineering of debt targets. Such a – “wholesale moving of goalposts” as he describes it – could well provide the catalyst for investors to rethink their view of the gilts market. “What does worry us would be a wholesale change to the inflation-linked Gilt market – these are things bond investors don’t like,” Amey said. And the resulting turmoil would be contagious for the rest of the gilt market too. Government statisticians are presently studying whether they need to make any changes to the RPI to bring it into line with CPI. The BOE would be consulted on whether any proposal is a fundamental change to the RPI calculation which is ‘materially detrimental’ to the holders of inflation-linked gilts. The agreement of the Chancellor of the Exchequer to any RPI change would only be required where the BOE to consider any change is fundamental and materially detrimental to linker holders. For Amey, the issue boils down simply to one of “whether you wish to destabilise debt markets…” “One big area where clarity is needed” from Osborne is how the government plans to get out of its low growth/fiscal austerity loop. “The government should recognise that very low interest rates can finance projects we couldn’t in the past,” he says. More specifically, he wants the Treasury to spell out how government plans for stg40bn of financial guarantees for infrastructure projects and stg10bn of guarantees for housing “will actually happen”. –London Bureau; tel: +442078627492; email: dthomas@mni-news.com [TOPICS: M$B$$$,MFBBO$,MFB$$$,M$$BE$]

Analysis: UK Osborne Faces Key Tests To Keep Gilts’ Allure – 1 Posted: 04 Oct 2012 11:30 PM PDT -PIMCO Asset Manager Warns Linker Changes Could Destabilise Gilt Mkt -Communication On Fiscal Rule Changes Will Be Key To Market Calm -Prospect More BOE QE In Nov A Prop – But Questions On QE’s Future By David Thomas LONDON (MNI) – Official UK fiscal targets look set to get ditched when Chancellor of the Exchequer George Osborne delivers his Autumn Statement on Dec 5; and dismal UK fiscal fundamentals mean a reassessment of the UK public finances at some point can’t be ruled out, whatever the present safe haven allure of gilts. Sterling asset managers and UK fiscal analysts warn the chancellor will need to thread his way carefully through several potential minefields in the months ahead. Above all, Osborne will need to handle the communication of any target/rule change much more deftly than he has in the past. His poor record to date for public relations suggests that there could be trouble ahead. However, Osborne may be able to hide any fiscal slippage behind covering fire recently provided by the Bank of England Governor Mervyn King. In an interview with Channel 4 recently, King said it would be alright to allow the debt burden to rise after 2014: “If it is because the world economy is growing more slowly, then it would be acceptable. It would not bit be acceptable to miss the debt target if there were no excuse for it,’ he said. PIMCO boss Bill Gross warned this week that the UK is part of a “ring of fire” of indebted nations and that around stg990bn of savings need to be found in the next 5/10 years. Greece, Spain, Japan and the U.S. form the other links on Gross’s ring. So far the UK has maintained its safe haven allure as the euro zone crisis continues to frighten away international investors from the troubled fringe of the single currency bloc. PIMCO’s Managing Director of Sterling Portfolios Mike Amey sees a “variety of risks out there – some could have a material effect, some not”. He is sanguine about what tack Osborne will take in his statement and its market impact, suggesting the chancellor will blame fiscal shortcomings on weaker-than-expected growth and lay the blame for that firmly at the euro’s door. Osborne should say he is sticking with his departmental spending plans but allow the cyclically sensitive part of the budget to climb. “His planned ‘resizing’ of government will remain intact, but the speed of the resizing will be slower,” Amey said. Amey dismisses ideas of brand new fiscal rules or targets winning cross-party support as politically unreal. Global Head of Fixed Income at Aberdeen Asset Management Paul Griffiths says markets have every right to be concerned about gilts. But the timing of any ‘snap’ impossible to forecast. Amey and Griffiths both agree that a UK ratings downgrade is unlikely to prove a catalyst even if one materialises. Both note the recent S&P downgrade of the U.S. failed to prevent a rally in U.S. Treasuries. For Griffith too, key to Osborne’s spin control will be explaining “why the slippage”. The chancellor will need to “demonstrate a clear narrative that he is sticking to the path of fiscal rectitude”. “Certainly, better delivery and clarity of message than he demonstrated at the time of the 2012-13 Budget will be the key,” Griffiths said. Some European voices look at the UK with a mixture of consternation and envy – an AAA rating and 10-year gilt yields close to those of bunds juxtaposed with a deficit and debt worthy of a Hellenic horror story. As Griffiths points out, if the UK had joined the euro in 1999, markets would not have had time to worry about a sprat like Greece. They would have had a much bigger fish to fry. Staying out means the Bank of England has been able to implement QE without the need for sterling’s real exchange rate to massively depreciate. ECB bond buying in the periphery – if and when that actually happens – might conceivably help some risk-on scenarios blossom in which gilts could lose some of their safe haven lustre, he surmises. “But let’s face it, the euro zone crisis is not going away anytime soon,” he quickly adds. –London Bureau; tel: +442078627492; email: dthomas@mni-news.com [TOPICS: M$B$$$,MFBBO$,MFB$$$,M$$BE$]

IMF Cuts Global Grwth Forecast To 3.3% 2012; 3.6% 2013: Press Posted: 04 Oct 2012 11:30 PM PDT FRANKFURT (MNI) – The world economy is expected to grow by 3.3% this year and 3.6% in 2013, according to the International Monetary Fund, marking downward revisions of 0.1 and 0.3 points respectively from its July forecast, German business daily Handelsblatt reported Friday. Eurozone GDP is seen contracting 0.4% this year and growing just 0.2% next year, which is downwardly revised from July’s predictions of -0.3% this year and +0.7% in 2013, according to excerpts of the IMF’s World Economic Outlook obtained by Handelsblatt. The WEO is to be released Tuesday. The IMF says in the report that downside risks to world growth have increased and are particularly dependent on the right policy steps being taken in the Eurozone and the United States to restore trust, according to the paper. The IMF also expects a continued decline in inflation rates and suggests more monetary policy easing. China is seen growing at 8.2% in 2013, revised down 0.2 points from its July forecast. India can expect 6.0% growth next year (down 0.6 points) and Brasil 4.0% (down 0.7 points) in 2013. Handelsblatt reported Thursday that the IMF was projecting 0.9% growth for the German economy this year and next, a reduction from its July forecasts of +1.0% and +1.4%, respectively. –Frankfurt bureau tel: +49-69-720-142. Email: ccermak@mni-news.com [TOPICS: M$G$$$,MI$$$$,MT$$$$,M$U$$$,M$X$$$,MGX$$$]

IMF lowers global growth forecasts to 3.3% in 2012 Posted: 04 Oct 2012 11:28 PM PDT …from 3.4% in previous forecast and also lowers 2013 to 3.6% from  from 3.9% Expects Eurozone  economy to shrink by 0.4% in 2012 and to grow 0.2% in 2013 Lowers Chinese economic growth to 8.2% in 2013 from 8.4% Handelsblatt

What a little belter…… Posted: 04 Oct 2012 11:18 PM PDT Excellent

Morgan Stanley chief warns on Wall St pay Posted: 04 Oct 2012 11:01 PM PDT The bank’s Chief executive James Gorman  is planning more job cuts and smaller bonuses for 2013 in an attempt to boost shareholder returns The axing of 4,000 jobs (7% of its workforce) is already underway and plans are afoot for more cost cutting including lower salaries to bolster returns on equity which were around 23% before the current crisis "We're generating 5 per cent, can we get back to 10 per cent? That's much more interesting to me than can we get back to 15 per cent or will we ever get back to the glory days – those are completely flawed anyway," said Mr Gorman. For the full FT story please ‘google’ the headline above

You are subscribed to email updates from ForexLive To stop receiving these emails, you may unsubscribe now.	Email delivery powered by Google
Google Inc., 20 West Kinzie, Chicago IL USA 60610