European morning wrap: Risk off morphs into risk on, euro zone periphery manufacturing PMI supportive

Irish September manufacturing PMI 51.8, up from 50.9 in August and the seventh successive month of growth Spain September manufacturing PMI 44.6, up from 44.1 in August. Highest read since February Italy September manufacturing PMI 45.7, up from 43.6 in August.  Demonstrably better than Reuter's median forecast of 44.1. Highest read since March Euro zone final manufacturing PMI 46.1, fractionally firmer than flash read of 46.0. Up from 45.1 in August Italian August unemployment 10.7%, unchanged from July and better than median forecast of 10.8% UK September manufacturing PMI 48.4, down from 49.8 in August and weaker than Reuters' median forecast of 49.0 UK August mortgage approvals 47,665, little changed from 47,556 in July, but weaker than Reuters' median forecast of 49,000 UK August mortgage lending -0.3 bln in August, weaker than Reuters' median poll of +0.5 bln and lowest since December 2010 French protesters march in 'resistance' to austerity Another domino falls as Hollande pushes France into depression - AEP at The Telegraph Strong rally in European stocks this morning led by Italy's FTSE MIB which is up hefty 1.9%.  Spain's IBEX is up 0.9%.  Some encouraging news on the euro zone periphery manufacturing PMI front (see above) has helped. Euro stronger across the board, EUR/USD up at 1.2900 from early 1.2820, having been as high as 1.2911 at one stage.  Asian sovereign buying seen early and BIS joined the fray buying circa 1.2845.  Buy stops were tripped through 1.2860 accelerating the rally. USD/JPY marginally firmer at 78.00 from the 77.85 which greeted me.  Underpinned by buying of the EUR/JPY cross which is up at 100.60 from early 99.80 against the backdrop of improved risk appetite.  US treasuries have also firmed, the benchmark 10 year yield up at 1.6335% from early 1.6163%. Cable and AUD/USD both up marginally against the better risk backdrop, cable up at 1.6150 from early 1.6125, AUD/USD up at 1.0365 from early 1.0335.