ForexLive European Morning Wrap: Sterling Collapse After Unexpected Poor PMI

UK Lib-Dems hold the seat of Eastleigh in U by-election: not the best result for the govt UK Nationwide February House Price Index 0.2% (m/m), as expected, 0.0% (y/y) vs -0.1 expectation German January Retail Sales 3.1% vs 1% expected, y/y 2.4% vs -1.8% Spanish Manufacturing PMI 46.8 vs 46.5 expectation, previous 46.1; Output was 47, both prints highest since mid 2011 Swiss PMI 50.8, against 52.2 expectation and a previous 52.5 Italian Manufacturing PMI 45.8 vs expected 47.6 and last at 47.8, lowest in three months French Manufacturing PMI 43.9 vs  expectation and previous print of 43.6 German Manufacturing PMI 50.3 vs 50.1 expectation and last at 50.1 Euro zone Manufacturing PMI 47.9 vs expected 47.8, last at 47.9; Output was 47.8 Italian January Unemployment 11.7% vs 11.3% expectation, previous 11.2%; highest since 1992 UK M4 Money Supply 0.9%, exp 0.3%, last 0.7% - biggest rise since august 2012 UK Manufacturing PMI 47.9, expectation vs a revised 50.5 (january), 51 was expected and currency damage followed Eurozone January Unemployment 11.9%, expectation was 11.8% previously 11.7% in december Eurozone Flash Inflation 1.8& vs exp 1.9%, last at 2.0% Portuguese Fin Min: Portugal can now envisage end of crisis, abandoning deficit measures would lead to risks  It was a relatively quiet start, following a generally lacklustre session in Asia. A push in EURUSD and EURJPY were held back from 1.3100 and 121.40 levels by sell orders and assisted by poor Manufacturing PMI from Italy. Markets receded from whence they commenced until the UK PMI shocker which sent sterling reeling from 1.5160 in cable and 0.8615 in EURGBP,  to 1.5105 and  0.8682 (high) leading the USD to immediately respond in other pairs. Cable support at 1.51 went swiftly, not long followed by 1.5050 and the threat of the 'big figure' level at 1.5000. The low at 1.5012 held by buyers ahead of the large barrier, rebounds have been limited to 1.5049 and EURGBP dipped back to 0.8660 briefly. The synopsis for sterling is not good and a real test of 1.50 is only a matter of time. In sympathy EURUSD took out the 1.3100 support but hasn't extended through recent heavy bids at 1.3020. Rallies have been limited though The USD fared well to re-threaten 93.00 in USDJPY and has enabled the USDCHF to break through recent highs at 0.9390 (high 0.9407). USDCAD also posted new 2013 highs 1.0327 Gold has found news lows at 1565 and one might suggest we have further to go across the board. All in all the catalyst to awaken the market was found and caught the market half asleep.