But risks exist to Portugal attaining 2011 deficit target Planned 2012 measures are “courageous” Europe needs stronger financial backstops

German Oct ZEW current conditions 38.4 vs  43.6 in Aug (exp 39.6) Both weaker than expected with EUR/USD slipping again to lows of 1.3663.

LONDON (MNI) – The UK Treasury put the blame for today’s higher-than-expected inflation numbers on rising energy prices and noted Bank of England forecasts that inflation is set to fall back rapidly in 2012. “The Government understands that these are difficult times for households, as price levels continue to be affected by high global oil [...]

A UK fund manager was apparently responsible for that recent 30 pip jump in the AUD/USD to 1.0175, but the move quickly reversed and we’re back down around 1.0135/40. Offers remain up ahead of  1.0180 and 1.0200, Bids are down at 1.0100, with stops through 1.0095

Tested support at  1.5700/10 after a reactionary high of 1.5785 on the CPI/RPI release., but market concerns over growth and QE outweigh, with a low of 1.5710 before a bounce back to 1.5730 /35 Looks like everyone had the same idea….

–Sep CPI +0.6% m/m; +5.2% y/y vs Aug 4.5% y/y; above median –Sep core CPI +0.2% m/m; +3.3% y/y vs Aug 3.1% y/y; above median –Sep RPI +0.8% m/m; +5.6% y/y; Aug RPIX +0.8% m/m; +5.7% y/y LONDON (MNI) – Consumer price inflation hit a three year high in September as utility bills soared, matching [...]

vs expected CPI+  0.4 %m/m and  +4.9 %y/y, RPIX 0.8%m/m , +5.7% y/y Cable gets a leg up to  1.5785 from  1.5755 on the improved inflation data release, but meets sellers and quickly falls back to pre release levels

Cable holding up fairly well ahead of this release with EUR/GBP taking the strain in early trading. One highly respected UK clearer is looking for a slightly above consensus CPI number of 0.5%m/m (vs 0.4% elsewhere) with RPI up at 0.7% (vs 0.5%). bearing in mind latest CFTC data is showing market positioning very short, we [...]

FRANKFURT (MNI) – The German federal government called for bids Tuesday on its E5 billion top-up of the 2.25%-coupon September 2021, 10-year bund, the Bundesbank announced. Bids for the top-up are due by 9:00 GMT Wednesday, October 19, with results of the allocation to be announced shortly thereafter. The top-up tranche will settle on Friday, [...]

Just seen stops flushed out on the downside in EUR/USD and AUD/USD, but follow through so far has been weak. Getting renewed reports now of Sovereign buying interest , last in the high 1.0130′s in AUD/USD Guess lack of vocals from ministers so far today has led the markets to test the side of obvious weakness [...]

Break here leads down to bids at 1.3685 (13 Oct low). We’ve been down to 1.3714 UPDATE: leveraged sellers behind this move lower as fall extends to 1.3706. Now informed 1.3685 should hold some reasonable bids on the first look

Just getting told of some sovereign interest to buy in the low 1.0160′s in the AUD/USD. AUD snagged a low of 1.0162 and we’re back up around 1.0170.

1.0170′s been the  recent low in a slow start for Europe, and hearing talk of sell stops building down through 1.0140. On the topside  looks like there should be some offers loitering in the 1.0225/30 area, but right now that looks miles away… Aud’s around 1.0180 Gerry’s off on a secret mission somewhere so I’ll be [...]

– Sales Hit by Major Typhoons, Lingering Summer Weather TOKYO (MNI) – Department store sales in Japan fell 2.4% in September, hit by two major typhoons on weekends, posting the third straight year-on-year drop, data released by the Japan Department Stores Association showed on Tuesday. Relatively high temperatures in the month also depressed autumn clothing [...]

FRANKFURT (MNI) – Eurozone new car registrations rose by 116,289 on the month in September, cutting the annual change to +1.3% from August’s 8.0% gain, the Association of European Automobile Builders (ACEA) reported on Tuesday. Excluding Cyprus and Malta, data for which are unavailable, 810,030 new cars were registered in September. Between January and September, [...]

DAX futures down -0.9%, CAC 40 futures down -0.9%.

France ahead of schedule on deficit reduction targets French GDP growth target of 1.75% for 2012 “surely too high”, will not revise now

JAPAN DATA: Monthly data from Japan Department Stores Association: –Japan Sept Department Store Sales -2.4% Y/Y Vs Aug -1.7% –Japan Store Sales Fall For 3rd Month In Row, Hit by Major Typhoons –Lingering Summer Weather in Sept Dampens Autumn Clothing Sales

Well you didn’t expect him to be optimistic, did ya? Love him or loathe him, latest from AEP at The Telegraph.