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• ECB’s Costa: Sovereign debt risk contagion is disturbing the transmission of monetayr policy
• Eurozone September trade balance rises to Eur 9.8bln (from Eur 1.7bln a year ago)
• ECB’s Costa: Important to consider future roles of central banks
• Japan PM Noda: If govt sets BOJ monetary policy steps and its goals, it would hurt BOJ’s independence
• EMU DATA: Sep direct+portfolio outflow E3.6bn; Aug…
• Italian Sept EU trade surplus Eur 1.002bln euros
• EUR/USD slips back again
• Mandelson calls a British EU referendum “inevitable”
• EU’s financial services chief Barnier: Sees European economic growth resuming next year
• Macro buyers surface in the AUD/USD
• Japan Opposition leader Abe Repeats Call on BOJ To Ease More
• Coeure: ECB Won’t Be Preferred Creditor In Debt Restructurings
• SNB’s Jordan: Franc remains high, weighing on Swiss economy
• Japan Lower House Dissolved As PM Vowed, Dec 16 Vote Expected
• EUR/USD trying to steady after early swoon
• SNB Chairman Jordan: Bank will stick to the Franc cap
• LDP’s Abe: Reiterates call for bold monetary easing
• We’re not really going anywhere very fast. Time for another EUR/USD poll within a poll
• Japan lower house dissolved ahead of December election
• The time-bomb at the heart of Europe

ECB’s Costa: Sovereign debt risk contagion is disturbing the transmission of monetayr policy Posted: 16 Nov 2012 02:07 AM PST Oh dear

Eurozone September trade balance rises to Eur 9.8bln (from Eur 1.7bln a year ago) Posted: 16 Nov 2012 02:02 AM PST September  Seasonally  adjusted exports fell -1.1% m/m, imports fell -2.7 % m/m. Unadjusted  exports +1% y/y, imports -4% y/y August trade balance revised to  Eur 5.2 bln from Eur 6.6bln

ECB’s Costa: Important to consider future roles of central banks Posted: 16 Nov 2012 01:37 AM PST Making comments on the ‘new normal’ after crisis (whatever that’s suppose to mean) Period before recession characterized by low inflation Banking union is a ‘key piece’ that’s missing Bloomberg reporting,

Japan PM Noda: If govt sets BOJ monetary policy steps and its goals, it would hurt BOJ’s independence Posted: 16 Nov 2012 01:30 AM PST Important for govt to closely cooperate with BOJ to beat deflation and boost economy The government won’t set BOJ monetary policy steps and goals, but it’s very likely going to heap alot of pressure on the central bank.

EMU DATA: Sep direct+portfolio outflow E3.6bn; Aug… Posted: 16 Nov 2012 01:10 AM PST EMU DATA: Sep direct+portfolio outflow E3.6bn; Aug outflow E2.2bn - Sep direct invest outflow E8.9bn; Aug outflow E12.1bn - Sep portfolio invest inflow E5.3bn; Aug inflow E9.9bn - Sep bond/note invest inflow E36.1bn; Aug inflow E28.1bn

Italian Sept EU trade surplus Eur 1.002bln euros Posted: 16 Nov 2012 01:04 AM PST From a  Sept 2011 deficit of  Eur 47 mln Italy’s World surplus Eur 408 mln from Sept a year ago where the deficit was  Eur 1.890 bln Exports to the EU fell 7.6% y/y, with a 13% fall in imports

EUR/USD slips back again Posted: 16 Nov 2012 01:01 AM PST Not being helped by the pressure being exerted on the EUR/AUD cross which is down at 1.2327 from early 1.2365. Reports have ‘real money’ selling the EUR/AUD cross aggressively this morning. EUR/USD back at 1.2745 having popped briefly upto low 1.2760s. We’ve been as low as 1.2742, sell stops as aforemented seen through 1.2740.

Mandelson calls a British EU referendum “inevitable” Posted: 16 Nov 2012 12:33 AM PST Former UK business secretary wrting in the FT. I am not a big fan of Mr Mandelson, and that’s putting it very mildly.

EU’s financial services chief Barnier: Sees European economic growth resuming next year Posted: 16 Nov 2012 12:28 AM PST Bless Economic growth impossible with excessive debt High debt level means higher tax burden in future EUR/USD wallowing around 1.2745.

Macro buyers surface in the AUD/USD Posted: 16 Nov 2012 12:25 AM PST That’s lifted the pair back above the 200 day MA at 1.0321 to 1.0348 session/day’s highs , but there are offers now sitting ahead of 1.0350. Sovereign bids have  also been touted on approach to 1.0300 The move’s also being helped by a  sharp downturn in the EUR/AUD cross which again has stalled into the 1.2390/10 area ( highs of early Nov and 200 day MA at 1.2410). AUD’s around  1.0343 with the cross down around  1.2322 from earlier highs in Asia of 1.2378

Japan Opposition leader Abe Repeats Call on BOJ To Ease More Posted: 16 Nov 2012 12:20 AM PST TOKYO (MNI) – Shinzo Abe, head of the main opposition party, repeated his call on the Bank of Japan to take additional monetary easing action, in order to help beat deflation, guide the yen weaker and promote sustained growth. “We want to conduct monetary policy boldly, by taking into account the possibility of revising the Bank of Japan Act,” Abe, who is considered to be a strong candidate for the new prime minister after general elections on Dec. 16, told reporters. Prime Minister Yoshihiko Noda dissolved the lower house on Friday as promised earlier this week. On Thursday, Abe said the biggest concern for Japan is prolonged deflation and a strong yen and called for “unlimited” monetary easing by the BOJ and a reduction in the policy rate to zero or below zero from the current range of zero to 0.1%. Recent remarks by the ring-wing politician spurred expectations for more pro-active monetary easing by the BOJ, sending the yen to Y81.46 against the dollar on Thursday, the weakest level since April 25, when it stood at Y81.69. “We now expect one or two more monetary easing measures by the Bank of Japan before Governor Masaaki Shirakawa’s term ends (in April),” said Chotaro Morita, chief strategist at Barclays Capital Securities Co. Meantime, Abe also said he would oppose to an idea of joining Trans-Pacific Partnership (TPP) trade negotiations as long as abandoning all tariffs are set as a precondition for the participation, in order to defend national interest of Japan. –email: yseki@mni-news.com –email: msato@mni-news.com [TOPICS: MMJBJ$,M$A$$$,M$J$$$,MGJ$$$]

Coeure: ECB Won’t Be Preferred Creditor In Debt Restructurings Posted: 16 Nov 2012 12:10 AM PST PARIS (MNI) – The European Central Bank will not demand to be treated differently from normal creditors in the case of debt restructuring, according to ECB Executive Council member Benoit Coeure, who ruled out future debt overhauls after that for Greece. “The idea is that the ECB will not demand a privileged status if debt restructuring is imposed,” Coeure told the French daily Les Echos in an interview published Friday. “When we publish the decision instituting our [sovereign bond] purchase program, we will detail this point in the introduction.” “We are aware that this principle reenforces the effectiveness of our program because investors will no longer fear that they alone will have to pay if a government has difficulties with its debt,” he said. Coeure acknowledged that the ECB cannot finance governments directly, “which means that it cannot voluntarily forego its claims on a government. That does not prevent it from being constrained to accept losses on debt it has purchased. In that case – which is hypothetical, remember – the ECB will make a contribution in the same manner as private investors.” Coeure defended the ECB’s initial opposition to restructuring Greek debt, since “this should not be part of the tools to manage public finances. Debt write-offs are a way of avoiding necessary reforms. I am convinced that there will not be other restructuring of public debt in the Eurozone.” There “will be an accord” on Greece’s bailout program, Coeure predicted, noting the broad consensus in Europe for a two-year extension for its debt targets, “which implies additional costs for creditors.” What remains to do is “to finalize the financing conditions,” he said. Coeure hinted that Greece may benefit as well from the distribution of central bank profits to governments, which would have to decide whether or not to transfer them to Greece. “It would be logical to do this for profits from the (previous bond-buying program) SMP,” he added, estimating that this would not amount to E12 billion once the national central banks have made necessary provisions. The central banker warned against “catastrophic” scenarios for the Eurozone, predicting a “slow” recovery next year. He noted that the ECB’s Governing Council decided last week that its monetary stance was appropriate to assure price stability, but noted that “this does not exclude any option for the future.” –Paris newsroom +331 4271 5540; email: ssandelius@mni-news.com [TOPICS: M$X$$$,M$$EC$,MT$$$$,M$$CR$,MGX$$$]

SNB’s Jordan: Franc remains high, weighing on Swiss economy Posted: 16 Nov 2012 12:06 AM PST Comments came out around half an hour ago, better late than never Reasons for introducing ceiling still valid Minimum exchange rate will continue to apply Franc ceiling has stabilised Swiss economy SNB will enforce ceiling ‘with utmost determination’ Forex reserves expose SNB to substantial FX risk

Japan Lower House Dissolved As PM Vowed, Dec 16 Vote Expected Posted: 15 Nov 2012 11:50 PM PST TOKYO (MNI) – Japan’s lower house of parliament was dissolved on Friday, as promised by Prime Minister Yoshihiko Noda in a surprise public announcement during parliamentary debate with opposition leaders this week. This sets the stage for a showdown between the ruling Democratic Party of Japan and the main opposition Liberal Democratic Party in general elections for the 480-seat House of Representatives (lower house). Voters are expected to go to the polls on Dec. 16 to deliver their second judgment on a national level since the DPJ took power away from the LDP in 2009 after a landslide win in lower house elections. During this period, the world has gone through two major slumps, first triggered by the collapse of Lehman brothers and then by the European sovereign debt crisis — clouding the prospects for Japan’s recovery from slow growth and years of deflation. Noda, the third prime minister under DPJ, has been seeking ways to trim soaring public debt while supporting the economy, contain the nuclear crisis caused by the March 2011 earthquake disaster and counter the drag from the yen’s rise and global slowdown on exporter profits. In July 2010 national elections, the ruling coalition led by the DPJ lost a majority in the upper house. During the 2010 election campaigns, the Prime Minister Naoto Kan called for parliamentary debate on the need to raise the 5% sales tax in order to secure a stable funding source for additional public spending on job creation, which he said should help Japan move out of stubborn deflation. Kan mentioned an idea of hiking the sales tax rate to 10% in the medium term, which appeared to have come as an abrupt proposal to some voters, prompting the public approval rating for the Kan administration to slump. Two summers later, however, Noda won support from the leaders of the two main opposition parties for doubling the consumption tax rate by 2015 in exchange for a value promise to dissolve the lower house and call a snap election. Opposition parties, which control the 242-seat House of Councilors (upper house), has been calling on Noda to call an election for the more powerful lower house but he has been cautious amid falling public support for his cabinet after telling the opposition camp in August that he would do so “in the near future.” Noda then came under fire from the opposition leaders for not delivering his promise sooner, further delaying parliamentary approval of a key bill that will allow the government to issue debt for financing spending in the current fiscal year that began on April 1. On Wednesday the embattled Prime Minister caught the opposition leaders off guard by making a rare public proposal that he would dissolve the lower house of the Diet on Friday if opposition parties agreed to the ruling coalition’s plan to cut parliamentary seats in electoral reform. In response, Shinzo Abe, who heads the LDP, told reporters after the debate that his party will endorse the reform plans in parliament early next year. The DPJ beat the LDP in 2009 by promising to boost Japan’s fiscal health through slashing “wasteful” government spending and reallocating tax money for projects that would support families with children and reduce unemployment. But the DPJ government soon hit a policy wall, realizing that there was only so much it could do to trim spending in order to generate funds for necessary public programs. In August 2012 the Japanese parliament enacted by majority vote legislation that would double the current 5% consumption tax by 2015 and improve social security services on condition that the economy continues to recover steadily. The government plans to hike the tax rate to 8% in April 2014 and to 10% in October 2015. –email: msato@mni-news.com [TOPICS: M$A$$$,M$J$$$,MGJ$$$]

EUR/USD trying to steady after early swoon Posted: 15 Nov 2012 11:42 PM PST Aforementioned buy orders (orderboard) down at 1.2740/50 have so far managed to hold the early swoon in the single currency. We’ve been as low as 1.2747 presently 1.2758. Talk has major US commercial bank notable buyer off the lows. Sell stops remain through 1.2740.

SNB Chairman Jordan: Bank will stick to the Franc cap Posted: 15 Nov 2012 11:33 PM PST Safe -haven capital flows remain a threat…

LDP’s Abe: Reiterates call for bold monetary easing Posted: 15 Nov 2012 11:31 PM PST Speaking in Tokyo. He’ll consider changing BOJ law Next months election a fight to win back Japan Japan economy will be main focus of election Aims to rebuild trust with the US Opposes ending all tariffs as condition to join TPP talks USD/JPY has rallied back over 81.00, presently at 81.15, no doubt helped by above comments.

We’re not really going anywhere very fast. Time for another EUR/USD poll within a poll Posted: 15 Nov 2012 11:16 PM PST It’s deju vu all over again. We sit at 1.2755. What’ll we see first 1.2705 or 1.2805? Reason/s for choice as always most welcome, but not obligatory.

Japan lower house dissolved ahead of December election Posted: 15 Nov 2012 11:12 PM PST As I mentioned yesterday, the 81.45/50 area was always likely to be a tricky technical resistance area for USD/JPY and so it proved. We topped out exactly on 81.45 and have so far retraced back as low as 80.89, presently at 80.98. There is talk now of sell stops through 80.80. I’d expect them to be relatively light.  Also talk of buy orders clustered down at 80.50/60. I certainly haven’t given up yet on seeing an even higher USD/JPY rate in the months to come.  Just a case of trying to work out how far this latest sell-off will extend.

The time-bomb at the heart of Europe Posted: 15 Nov 2012 10:52 PM PST ‘Why France could become the biggest danger to Europe’s single currency’  -  The Economist Mon Dieu!!! I’ve been saying for sometime that the situation in France worries me…..

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