European Morning Wrap: Risk Off Morphs Into Risk On
Reserve Bank of Australia cuts rates 25 bps to 3.25%
Spain's September jobless rises 1.7% m/m, by 79,645 to 4.7 million :(
Rajoy tells party he won't seek rescue this weekend - Europa press
UK September Nationwide house prices -0.4% m/m, -1.4% y/y, weaker than Reuters' median forecasts flat, -0.8% respectively
UK September construction PMI rises to 49.5 from 49.0 in August, but not quite as good as the median forecast of 49.8
Eurozone August PPI rises 2.7% y/y, marginally above Reuters' median forecast of +2.6%
U.S. Senate leaders are working on a plan to deal with the 'fiscal cliff' looming in the new year - New York Times
Spanish banks need more capital than tests find, Moody's says -Bloomberg
China, India consumer spending to triple by 2020: Study
Ghost of Bear Stearns haunts JP Morgan - Forbes
European stocks opened fairly sharply underwater, only to recover throughout the morning. Eurostoxx 50 having been down around -0.7% is presently up +0.7%. Best performing market is Spain's IBEX, which is up a respectable +1.4%. Elsewhere, euro zone periphery bond yields have come lower.
EUR/USD is up at 1.2925 from 1.2900 on my arrival. Inbetween though we've been down to 1.2880 and then up to 1.2930. The release of really appalling Spanish jobs data (see above) took the wind out of the single currencys' sails early. However Asian sovereign/BIS buys in the 1.2880/90 zone provided a base for the subsequent rally.
As European stocks have recovered/euro zone govt bond yields have come lower, so EUR/USD has fought higher. Buying by the infamous US investment bank has been noted along the way.
Sell orders now seen clustered 1.2930/50, buy stops through 1.2960.
Cable up marginally at 1.6160 from early 1.6145. Middle Eastern sovereign buying was noted into dip to 1.6130 area.
USD/JPY effectively unchanged at 78.10. Business as usual then.
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