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Friday, November 9, 2012

Your forexlive.com ENewsletter

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EUR/USD trying to steady

Posted: 09 Nov 2012 02:03 AM PST

From session low 1,2728 we’re back up at 1.2740.

ACB buying noted in recent trade. Surprised?  Not on your nelly!!!

Interview: Eurosceptic Tide Adds To Angst For Embattled London

Posted: 09 Nov 2012 02:00 AM PST

- City of London Corporation Chair Talks Up London

By David Thomas

LONDON (MNI) – Ahead of what look set to be tense talks on the EU
budget later this month, the City of London is becoming concerned that
the spreading climate of euro-scepticism in UK politics could harm its
interests.

However, the City of London Corporation’s Mark Boleat is doing his
level best to stay closely engaged with key policy developments and
players in Europe.

Among those developments, MIFID and Solvency II present specific
threats to London’s financial sector.

“Euro scepticism has never been as great in this country,” says
Boleat, who can trace his ancestral roots back to Breton yeomanry.

Boleat’s lament follows a warning from German Chancellor Angela
Merkel on Wednesday that the rising political disdain for Europe in the
UK could leave the country feeling lonely and unhappy.

Quite apart from euro scepticism, Boleat has plenty of negative PR
to battle against. Not the least of this is the misleading perception
that London is bearing the whole burden of the banking industry’s global
downsizing.

The decision of UBS to cut a significant number of jobs as well as
whole areas of activity in London needs to be seen as part of a global
re-scaling strategy rather than reflecting particularly on London,
Boleat argues.

“UBS is cutting jobs globally. They have a lot of jobs in London,
so inevitably there will be cuts in London. It is a development which is
industry level,” he says.

Swimming against that tide, several insurance companies have made
decisions to expand in London while Bloomberg is engaged on a
substantial expansion plan here.

Reports that the City could lose 100,000 jobs in the shake out from
the crisis is massively exaggerated, Boleat suggests. That ballpark
number refers to the UK finance sector as a whole rather than just
London.

He jokes that London is hardly becoming a ghost town:

“The tube was still packed this morning.”

The fact is, he says, the number of actual investment bankers
working in the City is quite small, numbering only 25,000 to 30,000.

Boleat also has his work cut out defending the City’s reputation
from the backwash of the Libor scandal and the widespread lambasting of
its investment banking ‘culture’.

“The Libor scandal goes back 7-8 years and wasn’t confined to
London or British banks,” he points out.

Even Barclays – the bank currently in the eye of the Libor storm –
has not been given the credit it deserves for its good behaviour since
the Libor scandal was exposed at leading investment banks.

“Barclays went for the fine first to win brownie points,” he
points out.

And it “won’t just be British banks who get hit with fines,” he
adds.

Noting that the Libor review conducted by Martin Wheatley of the
FSA “went down very well”, Boleat speculates that there could be an
effort by other financial centres around the world to exploit the recent
financial revelations to undermine London’s globa standing.

“New York is blaming the “air” in London,” he says.

“A couple of regulators in America do seem to be behaving in an
unusual way. But there is more of a problem with the image of London in
London than the image of London abroad,” he says.

Also, London is well ahead of the regulatory reform curve, Boleat
stresses.

“Most of the necessary measures have already been taken over the
last 5 years.”

But he is conscious of the fact that all banks will be reducing or
dropping activities where there is a serious risk to their reputations.

“For instance, off-balance-sheet activity in far-flung places,
involving millions of pounds of tax savings,” he says.

Overall, Boleat says the banks “can live with Vickers” and the
report’s ringfence proposal.

“There is scope for flexibility – banks are all a little bit
different one from another”.

But that view runs somewhat counter to the recent public statements
of Bank of England Executive Director Andrew Haldane. Haldane told the
Parliamentary Commission on Banking Standards that he favoured a less
flexible ringfence and backed a key element in the U.S. Dodd-Frank
legislation which would limit any bank’s effective market share to 10%.

FSA Director of UK banks Andrew Bailey also warned the banking
lobby on Wednedsday that regulators would be standing tall and talking
tough.

But Boleat is dead against Dod-Frank style rules, which he says
even the U.S. doesn’t really want.

“One thing we don’t want is writing rules in stone,” Boleat says.

“It is a question of finding the right balance.”

The next governor of the Bank of England will be at the centre of
that debate, particularly so given the far-reaching new powers with
which it will be endowed to supervise and regulate the banking industry.

“This will mean huge power to the BOE,” he says, “powers which
most other countries only entrust to governments”.

That means the Bank will need “someone who can chair a board” at
the top of the structure.

“There is no way one person can do this on their own,” Boleat says.

-London bureau; tel: +4420782627492; email: dthomas@marketnewws.com

[TOPICS: M$B$$$,M$$BE$, M$$CR$]

Update: UK Sep Trade Gap On Lower Oil, Other Fuel Imports

Posted: 09 Nov 2012 02:00 AM PST

-UK Sep global goods trade deficit stg8.368b vs stg9.984b Aug
-UK Sep total trade deficit stg2.699bn vs stg4.309bn Aug
-Adds Detail To Version Transmitted At 0930GMT

LONDON (MNI) – A sharp decline oil and other fuel imports in
September, reversing a sharp rise in August, saw the UK’s trade
deficits narrow.

The September total trade deficit narrowed to stg2.699 billion from
a revised stg4.309 billion in August while the September goods trade
deficit shrunk to stg8.368 billion from stg9.984 billion. Oil imports
alone fell stg566 million on the month, and the oil deficit shrunk by
stg428 million to stand at stg1.393 billion.

A National Statistics official said imports of oil and
other fuel imports were volatile, reflecting the timing of deliveries.
The arrival times of tankers and the like can swing these numbers.

The services trade balance, on the other hand, was little changed
on the month in September, nudging down to st5.669 billion from
stg5.675 billion in the previous month.

The non-EU goods deficit narrowed sharply, to stg3.972 billion
from stg5.004 billion, while the EU deficit shrunk to 4.396 billion from
stg4.980 billion.

The data showed an improvement in the underlying trade position
with both the quarterly and yearly comparisons showing a narrowing in
the trade deficit.

The quarterly data showed the Q3 goods trade deficit narrowed to
Stg 25.443 billion from stg 28.059 billion in Q2 and down from stg27.751
billion in Q3 last year.

Imports fell 0.7% on the previous quarter while exports rose 2.6%.
Imports were down 0.8% on Q3 2011 and exports were up 2.0%.

–London newsroom: 44 20 7862 7491; email: drobinson@marketnews.com

[TOPICS: M$BDS$,M$B$$$,MABDS$]

More EU official: All Troika analyses on Greece are done on the assumption of two more years for reaching surplus target

Posted: 09 Nov 2012 01:56 AM PST

  • There will be no accidental, or any other Greek default on Nov 16 when t-bills mature (phew)

Cyprus mumble mumble…….Spain mumble mumble…….Portugal mumble mumble…..  STFU!!!

You CAN have TOO MUCH eu official…….

BOE Data: Mortgage Rates Fall In Oct With FLS Up And Running

Posted: 09 Nov 2012 01:50 AM PST

LONDON (MNI) – Interest rates on fixed rate UK mortgages fell
markedly in October, with the Bank of England’s Funding for Lending
Scheme up and running.

The BOE’s Quoted Rates data showed the average rate on a 2 year
fixed 90% loan-to-value mortgage dropped to 5.64% in October from 5.85%
in September while the rate on a two year fixed 75% LTV fell to 3.48%
from 3.67%. These falls took rates back to levels last seen in the
spring.

The BOE’s Funding for Lending Scheme went live in August and was
set up to help counter the rising rates, and tighter credit conditions,
that had materialized as a result of the intensification of the Eurozone
crisis.

The average lending rate on a sterling 3 year fixed rate mortgage
for 75% LTV fell to 3.89% from 4.05% and on a 5 year 75% LTV it fell to
3.96% from 4.07%.

The average standard variable rate, however, rose to 4.35% from
4.28% in September.

— London newsroom: 44 20 7862 7491; email: drobinson@marketnews.com

[TOPICS: MABDS$,M$B$$$,M$$BE$]

UK Analysis: Construction Output Falls In Third Quarter

Posted: 09 Nov 2012 01:40 AM PST

– Falls 2.6% Q/Q vs 2.5% Q/Q Drop Included In First Estimate GDP
– New Construction Figures Will Not Lead To GDP Revision

LONDON (MNI) – Output in the construction sector fell again in the
the third quarter, according to new data from the Office for National
Statistics.

The ONS data show construction output dropped 2.6% on a seasonally
adjusted basis in Q3. The data show output in the sector fell 11.3%
compared with the third quarter of 2011.

In its first estimate of Q3 GDP, the ONS estimated that
construction output fell 2.5% on the quarter. That number will be
replaced with today’s 2.6% outturn when the ONS publishes its second
estimate of Q3 GDP.

National statistics said that as the construction sector only
accounts for 7% of UK economic output, today’s reading will not make any
significant difference to the second estimate of GDP when it is released
on November 27.

–London newsroom: 44 20 7862 7491; email: wwilkes@marketnews.com

[TOPICS: MABDS$,M$B$$$,MT$$$$]

UK Sep Trade Gap On Lower Oil, Other Fuel Imports

Posted: 09 Nov 2012 01:40 AM PST

-UK Sep global goods trade deficit stg8.368b vs stg9.984b Aug
-UK Sep total trade deficit stg2.699bn vs stg4.309bn Aug

LONDON (MNI) – A sharp decline oil and other fuel imports in
September, reversing a sharp rise in August, saw the UK’s trade
deficits narrow.

The September total trade deficit narrowed to stg2.699 billion from
a revised stg4.309 billion in August while the September goods trade
deficit shrunk to stg8.368 billion from stg9.984 billion. Oil imports
alone fell stg566 million on the month, and the oil deficit shrunk by
stg428 million to stand at stg1.393 billion.

A National Statistics official said imports of oil and
other fuel imports were volatile, reflecting the timing of deliveries.
The arrival times of tankers and the like can swing these numbers.

The services trade balance, on the other hand, was little changed
on the month in September, nudging down to st5.669 billion from
stg5.675 billion in the previous month.

The non-EU goods deficit narrowed sharply, to stg3.972 billion
from stg5.004 billion, while the EU deficit shrunk to 4.396 billion from
stg4.980 billion.

–London newsroom: 44 20 7862 7491; email: drobinson@marketnews.com

[TOPICS: M$BDS$,M$B$$$,MABDS$]

ECB’s Makuch: Economic outlook for euro zone worsening, but still manageable

Posted: 09 Nov 2012 01:39 AM PST

  • ECB ready to act on rates in both directions if necessary
  • Policy transmission mechanism functions well (I always think of a car when I hear that term)

Little tip pumpkin, wouldn’t be in any hurry to tighten monetary policy just yet :)

Germany’s Econ Min: Weak Econ Phase Will Be Only Temporary

Posted: 09 Nov 2012 01:30 AM PST

BERLIN (MNI) – The weak phase that the German economy is currently
going through will be only temporary, the German Economics Ministry said
in its latest monthly report released Friday.

“After the expansion of economic activity in the first three
quarters of 2012, a temporary weaker trend for the winter half-year is
becoming apparent,” the ministry said. It expects slowing investments
and a declining growth contribution from foreign trade.

In the third quarter, German GDP likely grew “slightly,” the
ministry said.

“The risks are still significant,” the report noted. “However, one
can expect that the phase of weakness will be temporary.”

Domestic upward forces are still supporting private consumption,
the ministry argued. Moreover, the export sector will profit from a pick
up of the global economy in the course of 2013, it reckoned.
“Furthermore, monetary policy is still stimulating” the economy, the
report noted.

–Berlin bureau: +49-30-22 62 05 80; email: twidder@mni-news.com

[TOPICS: M$X$$$,MGX$$$,M$$CR$,M$G$$$,MT$$$$]

Fitch affirms Austria at AAA: outlook stable

Posted: 09 Nov 2012 01:19 AM PST

Whoopeeeee, snapps for everyone!!!

EU official: Eurogroup to discuss Greece in great detail

Posted: 09 Nov 2012 01:16 AM PST

You betcha.

  • To discuss Spain, Cyprus on Nov 12
  • Troika in Cyprus to push forward bailout talks
  • Cypriot banks hard-hit by Greek restructuring
  • Know of no Spain request for more assistance
  • Greece passed ‘vast amount’ of legislation
  • Eurogroup will have reports on new Greek laws
  • Eurogroup will have Greek compliance report
  • One round of talks may not suffice on Greece (for pities sake)
  • Sees ‘intensive discusssion’ on Greek govt actions
  • Sees Eurogroup evaluation of Greek govt actions
  • Greek authorities have made enormous efforts
  • Eurogroup to ‘factor in’ Greek debt redemption

And on and on….

Enough of all that claptrap.

US treasury yields lower again, weighing on USD/JPY

Posted: 09 Nov 2012 01:10 AM PST

The benchmark 10 year treasury yield is down at 1.6097% from the 1.6284% which greeted me.

This won’t be helping USD/JPY any.  The pairing is down marginally, presently at 79.32 from the 79.53 I saw first thing.

Talk now of buy orders clustered 79.15/25,  light sell stops below there and then more notable sell stops below 79.00.

ITALY DATA: September SA industrial output -1.5% WDA.

Posted: 09 Nov 2012 01:10 AM PST

ITALY DATA: September SA industrial output -1.5% m/m, WDA -4.8% y/y
–The worst m/m drop since April 2012, as output shrank in all sectors
–WDA y/y index contracted for 13th consecutive month
–Jul-Sep 3-month moving average -0.1% vs the previous three months
–There were 20 working days in September 2012, Vs 22 in September 2011

EUR/USD sell-off extends after German Finance Ministry comments

Posted: 09 Nov 2012 12:55 AM PST

We’re down at 1.2733.

Barrier option interest has been well-documented, defensive buy orders infront at 1.2700/20.

I’m getting a feeling of deja vu.  Yesterday’s European wrap up headline was ‘Euro consolidating recent losses’

Could well be a repeat today.  Only a move through 1.2700 would get me to change at this juncture. I’m not holding my breath.

German Economy Ministry: German growth to weaken noticeably in winter

Posted: 09 Nov 2012 12:23 AM PST

Dow Jones headlines

  • Risks to growth outlook “significant”
  • Weakness in Germany likely to be temporary

German Economy Ministry says firms holding back on investments in Q4, Q1 2013

Posted: 09 Nov 2012 12:14 AM PST

That’s certainly not what a weak European economy needs :(

  • Expects GDP in Q3 to have increased slightly

Reuters headlines.

Forexlive readers pretty much got it spot on

Posted: 09 Nov 2012 12:09 AM PST

Yesterdays’ poll within a poll taken when EUR/USD was 1.2755 and with 1.2705-1.2805 parameters had Forexlive readers split exactly down the middle 7-7.

And here we are 24 hours later  sitting at…………………………1.2755, with both parameters still both intact and not having been really seriously tested.

ECB’s Noyer: Sees progressive return to growth in Europe in 2013

Posted: 08 Nov 2012 11:54 PM PST

  • French banks have been considerably reinforced
  • French banks won’t face Spanish scenario
  • Speculative bank activities should be isolated/banned

Interviewed in Le Progres. Bloomberg reporting.

FRANCE DATA: Sept industry output -2.7% m/m; Aug m/m.

Posted: 08 Nov 2012 11:50 PM PST

FRANCE DATA: Sept industry output -2.7% m/m; Aug +1.9% m/m (+1.5%)
– Below expected; MNI analysts survey median forecast -0.2% m/m
– 3Q industry output flat q/q; 2Q -0.4% q/q
– Sept mfg output -3.2% m/m after Aug +2.1% m/m (+1.8%)
– Please see MNI Mainwire for further details

FRANCE DATA: Sep central govt deficit E85.0 bln vs…

Posted: 08 Nov 2012 11:50 PM PST

FRANCE DATA: Sep central govt deficit E85.0 bln vs Sep 2011 E92.7 bln
– Jan-Sep outlays +1.2% y/y; Jan-Sep revenues +2.1% y/y
– See MNI’s Mainwire for more details


at 6:04 PM

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