FRANKFURT (MNI) – The European Central Bank on Tuesday allotted
E29.4691 billion in its main seven-day refinancing operation at a fixed
rate of 1.00%.

The ECB satisfied all of the 83 bids received.

Today’s operation resulted in a net drain of E137.0209 billion
after the ECB allotted E166.490 billion in its 7-day MRO last week.

–Frankfurt bureau. Tel: +49-69-720-142. Email: frankfurt@marketnews.com

[TOPICS: M$X$$$,M$$EC$,MGX$$$]

–Adds Comments On Consumer, Retail And Construction Sentiment

Feb — MNI analysts survey — Jan Revised from
lowest median highest
————————————————————————
Econ Sentiment 94.4 92.8 93.6 94.1 93.4 —
Industry -5.8 -7.5 -7.0 -6.5 -7.0 -7.2
Services -0.9 -1.0 -0.4 0.0 -0.7 -0.6
Consumers -20.3 na na na -20.7 —
Retail -14.3 na na na -15.5 —
Construction -24.5 na na na -28.1 -28.3
————————————————————————
Business Climate: -0.18 -0.20 -0.17 -0.15 -0.21 —

PARIS (MNI) – Economic morale in the Eurozone recovered more than
expected in February, led by a marked improvement in industry
expectations, the European Commission said Tuesday.

After a 0.6-point upturn in January, the Commission’s sentiment
index gained a full point in February to a four-month high of 94.4. Most
analysts had expected a more modest gain and some a slight decline.

Alongside the upturn in other leading indicators of late, this
suggests that the worst of the slump is over and that activity could
begin to expand again in 2Q. However, the slowdown in global economic
activity this year and the daunting consolidation efforts required in
the Eurozone point to an extended period of convalescence ahead.

Among the largest economies, sentiment improved in France (+1.6
points), the Netherlands (+1.2), Italy (+1.0) and Germany (+0.1).
Yet only in Germany is the index above average.

After disappointing in January, industry morale surpassed
expectations with a 1.2-point rise to a seven-month high. Firms were
more positive about production prospects, total order books and stocks
of finished products, while export order books and past production were
assessed more negatively.

The Commission’s separate Business Climate Indicator rose for the
third month in a row, edging up 0.03 point after a 0.21-point rise since
November. Here again, the improvement was mainly driven by better
production expectations, order books and lower finished-goods
inventories.

The improvement in the Eurozone factory PMI in February (49.0) was
marginal after January’s 1.9-point rebound, pointing to limited upside
in the near term. While output appears to be no long contracting (50.4),
the ongoing decline in new orders (47.1) signals sluggish activity
ahead.

Contrary to most forecasts, sentiment in the services eroded
slightly after a marked rebound in January, as positive assessments of
the past business situation and expected demand were broadly offset by
weaker past demand.

However, morale in the financial services, which is not seasonally
adjusted, improved sharply for the second month in a row with a
four-point jump to a six-month high, driven mainly by recent trends, but
also somewhat brighter near-term demand prospects.

In contrast to the industry PMI, the Eurozone services PMI suffered
a setback in February, due largely to a reversal of the strong pick-up
seen in France in January. Eurozone activity fell back into negative
territory (49.4) and new business remained on a downward trend (49.1).

The Commission’s flash estimate for consumer sentiment was revised
down marginally to show a 0.4-point monthly gain to -20.3 — still
7.6 points below the long-term average. Households were less pessimistic
about overall economic prospects and their own financial outlook but
more concerned about future labor market trends. Their plans for major
purchases over the coming year deteriorated, approaching the record low
seen last May.

Retail sentiment recovered by 1.3 points slightly after a steep
slide over the past year, remaining 5.4 points below average. Retailers
said recent business had picked up and were somewhat less pessimistic
about near-term trends.

In construction, morale improved markedly to the highest
level in over three years, as fuller order books and better hiring
prospects (notably in Spain) offset weaker recent activity.

Apart from construction, employment expectations deteriorated in
all sectors. Selling-price expectations were revised down in all
sectors except for industry.

–Paris newsroom +331 4271 5540; email: ssandelius@marketnews.com

[TOPICS: M$XDS$,M$X$$$,MT$$$$]

Correct

• Fundamental solutions for US have not been embarked on

Correct

• And one day it’s all gonna come back and bite them in the arse (that bit’s mine)

D’ya think S&P might give me a job?

Italy’s sold Eur 2.5 bln of 4.75% May 2017 BTP’s,  cover 1.41 (vs 1,3.) , yield 4.19% (vs 5.39%)  out of a target Eur 2-2.5bln

Sold Eur 3.75 bln of new 10yr 5.50% benchmark  Sep 2022 BTP’s, cover 1.4 (vs 1.42) , yield 5.5 % (from 6.08%) out of target Eur 3.375 bln

A strong auction as expected with improved yields and a full take up. Euro’s steady around 1.3435/40

Next up Belgium in about 20 mins…. if anyone’s interested!

FRANKFURT (MNI) – The European Central Bank Tuesday allotted
E133.8895 billion in one-day refinancing agreements (refis) at a fixed
rate of 1.0%.

The operation, which had no pre-set amount, attracted 71 bidders.
The refis will settle tomorrow and will expire on March 1, 2012.

– Frankfurt bureau: +49 69 720 142; email: frankfurt@marketnews.com –

[TOPICS: M$$CR$,M$X$$$,M$XDS$,MN$MM$,M$$EC$]

Feb — MNI analysts survey — Jan Revised from
lowest median highest
————————————————————————
Econ Sentiment 94.4 92.8 93.6 94.1 93.4 —
Industry -5.8 -7.5 -7.0 -6.5 -7.0 -7.2
Services -0.9 -1.0 -0.4 0.0 -0.7 -0.6
Consumers -20.3 na na na -20.7 —
Retail -14.3 na na na -15.5 —
Construction -24.5 na na na -28.1 -28.3
————————————————————————
Business Climate: -0.18 -0.20 -0.17 -0.15 -0.21 —

PARIS (MNI) – Economic morale in the Eurozone recovered more than
expected in February, led by a marked improvement in industry
expectations, the European Commission said Tuesday.

After a 0.6-point upturn in January, the Commission’s sentiment
index gained a full point in February to a four-month high of 94.4. Most
analysts had expected a more modest gain and some a slight decline.

Alongside the upturn in other leading indicators of late, this
suggests that the worst of the slump is over and that activity could
begin to expand again in 2Q. However, the slowdown in global economic
activity this year and the daunting consolidation efforts required in
the Eurozone point to an extended period of convalescence ahead.

Among the largest economies, sentiment improved in France (+1.6
points), the Netherlands (+1.2), Italy (+1.0) and Germany (+0.1).
Yet only in Germany is the index above average.

After disappointing in January, industry morale surpassed
expectations with a 1.2-point rise to a seven-month high. Firms were
more positive about production prospects, total order books and stocks
of finished products, while export order books and past production were
assessed more negatively.

The Commission’s separate Business Climate Indicator rose for the
third month in a row, edging up 0.03 point after a 0.21-point rise since
November. Here again, the improvement was mainly driven by better
production expectations, order books and lower finished-goods
inventories.

The improvement in the Eurozone factory PMI in February (49.0) was
marginal after January’s 1.9-point rebound, pointing to limited upside
in the near term. While output appears to be no long contracting (50.4),
the ongoing decline in new orders (47.1) signals sluggish activity
ahead.

Contrary to most forecasts, sentiment in the services eroded
slightly after a marked rebound in January, as positive assessments of
the past business situation and expected demand were broadly offset by
weaker past demand.

However, morale in the financial services, which is not seasonally
adjusted, improved sharply for the second month in a row with a
four-point jump to a six-month high, driven mainly by recent trends, but
also somewhat brighter near-term demand prospects.

In contrast to the industry PMI, the Eurozone services PMI suffered
a setback in February, due largely to a reversal of the strong pick-up
seen in France in January. Eurozone activity fell back into negative
territory (49.4) and new business remained on a downward trend (49.1).

MORE

–Paris newsroom +331 4271 5540; email: ssandelius@marketnews.com

[TOPICS: M$XDS$,M$X$$$,MT$$$$]

HAMBURG, Germany (MNI) – To restore the confidence of financial
markets in the Eurozone, there is no alternative to deficit cuts and
structural reforms for governments and recapitalization for banks,
Bundesbank Vice President Sabine Lautenschlaeger said Tuesday.

While 2012 will be another “year of crisis, there are signs that we
are coming closer to a solution,” Lautenschlaeger said in her New Year’s
greetings at the German central bank’s regional branch here.

However, “we cannot expect rapid success,” she cautioned, since
patience and persistence are needed to overcome the crisis.

The resolution of the sovereign debt crisis must go to the root of
the problem and not just deal with symptoms, Lautenschlaeger stressed.
“If, for example, the debt of some [Eurozone] member states is the
problem, more debt cannot be the solution.”

Lautenschlaeger rejected criticism that fiscal consolidation can
drive an economy into the ground, arguing that there was “no
alternative” to more savings.

In addition, bailout countries must undertake structural reforms to
give greater flexibility to labor, goods and services markets in order
to restore competitiveness.

While Ireland has shown that this is possible and Spain and Italy
are moving in the right direction, developments in Greece are less
satisfactory, she said. “If the savings and reform targets are not met,
help [from abroad] makes no sense,” she said. “It can smooth the path
but not substitute for reforms.”

At the Eurozone level, leaders have the choice between a “veritable
fiscal union” or tougher rules for national budget policies,
Lautenschlaeger said. Without control over national budgets, there can
be no common issuance of debt, she insisted. “That would be the wrong
route.”

As for banks, without strengthening their capital base, market
confidence cannot be restored, Lautenschlaeger underscored.

[TOPICS: M$X$$$,MGX$$$,M$$CR$,MFX$$$,M$G$$$,M$$EC$]

EMU DATA: February business climate index -0.18, January unrev -0.21
– See MNI MainWire for details

EMU DATA: February econ sent index up to 94.4; January unrev 93.4:
European Commission
– EMU February econ sentiment above MNI survey fcast median (93.7)
– EMU February consumer confidence up to -20.3, below expected (-20.2)
– EMU February industry confidence up to -5.8, above expected (-7.0)
– EMU February services confidence down to -0.9 vs January -0.7
– EMU February construction confidence up to -24.5 vs January -28.1
– EMU February retail sector sentiment up to -14.3 vs January -15.5
– See MNI MainWire for details

Business climate rises to -0.18 (exp -0.15) in Feb from -0.21 in Jan

Feb Cons Inflation expectations 26.4  from 26.8 in Jan, producer prices 7.0 from revised 6.7 in Jan

Conmsumer inflation expectations down to 26.4 from 26.8 in Jan, producer prices expectations up to 7.0 in Feb from a revised  6.7 in Jan

Bit of  a mixed bag there but EUR/USD’s slightly softer sround 1.3435

No shit sherlock

• Real risk of euro zone crisis if economies pushed too hard
• Greece has highest risk of leaving euro zone
• Monetary union without fiscal union not impossible
• ECB’s LTRO has helped euro zone sovereign bond markets (don’t miss a trick, do they)
• Greek debt swap will have long-term effects

Comments made by S&P’s Kraemer.  I know I’ve said this before, but I really did like him in Seinfeld…..

EUR/USD sits at 1.3440, where it was when I parked my bum first thing this morning.  Is it home time yet?

We were up at 1.5876 earlier, and there seems to be some views that today’s numbers (total sales balance) may be encouraging coming in around -10/12 from -22 last month.

The survey can be a bit volatile and isn’t always a great indicator of UK retail  movements, but it’s giving the market something to chew on at the moment.

Cable has strong resistance just above 1.5900 wth the 200 day MA at 1.5903, but has offers ahead of it at 1.5875/85  ( 1.5882= 76.4 fibo of the 1.5904/1.5810 move).  Buy stops are in place on a break of 1.5910

On the flipside there are bids down at 1.5800/10 with  sell stops down through 1.5790.

Cable’s sitting around 1.5855

• Says panel can decide on bond purchases on secondary market via EFSF bailout fund

Guess the news hasn’t helped the euro any. We’re down at 1.3433 in directionless, choppy,  trade.

I like this one as i’m thinking of my next wine buying trip to France..

CitiFX have gone short of EUR/GBP at 84.73 with a target of 82.50 and a stop of 85.55, as a short term play for a maximum of 1 month.

They feel that the drop in cable on the back of the last round of BOE minutes was overdone and ongoing concerns over Greece may continue to weigh on the EUR/USD in the short term.

Brandenburg CPI

February: +0.8% m/m, +2.5% y/y
January: -0.4% m/m, +2.2% y/y
—
Pan-German CPI

MNI median forecast: +0.5% m/m, +2.2% y/y
MNI forecast range: +0.4% to +0.8% m/m

January: -0.4% m/m, +2.1% y/y
—

BERLIN (MNI) – Consumer prices in the eastern German state of
Brandenburg rose 0.8% in February, lifting the annual inflation rate to
+2.5% from +2.2% in January, the state statistics office said Tuesday.

The monthly result is above the median forecast of +0.5% for
pan-German CPI in a MNI survey of analysts.

During the winter holiday season, prices for package holiday tours
spiked 9.4% on the month, while restaurant and hotel services climbed
1.1%.

On the energy side, heating oil was up 3.1% on the month, motor
fuel rose 2.2%, while electricity and gas remained unchanged.

Food prices climbed 1.5% on the month, with seasonal produce up
5.7%. Alcoholic drinks and tobacco products were up 0.7%. Clothing and
shoes increased by 2.0%.

Annual price developments were driven mainly by energy price
increases, with heating oil up 19.2%, motor fuel up 9.0%, gas up 8.1%
and electricity up 4.4%.

Package holiday tours were up 4.5% on the year, hotel and
restaurant services increased 3.0%.

Food prices climbed 2.8% on the year, with seasonal produce down
4.9%. Clothing and shoes rose 3.1%.

CPI ex-heating oil and motor fuel was up 0.7% on the month and 2.0%
higher on the year. CPI ex-seasonal food rose 0.7% on the month and
climbed 2.6% on the year.

Inflation is expected to slow in the near term on the back of
weaker domestic and global economic growth and energy base effects.

“Assuming slower energy-price inflation, year-on-year inflation
should tend to moderate from its present level over the next few
months,” the Bundesbank predicted earlier this month.

The German Finance Ministry last week projected inflation to slow
this year due to declining imported price pressures and an expected more
moderate rise in unit labor costs.

The economic panel of the German Banking Association (BDB),
consisting of the chief economists of the main private banks in Germany,
last week forecast German inflation of 1.7% this year and 1.8% next
year. The OECD forecast earlier this month HICP harmonized inflation for
Germany of 1.6% in 2012 and 1.5% in 2013.

For detailed information see data table on MNI MainWire.

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

[TOPICS: M$G$$$,MAGDS$,M$X$$$,M$XDS$,MT$$$$]

Hesse CPI

February: +0.8% m/m, +2.2% y/y
January: -0.3% m/m, +1.9% y/y
—
Pan-German CPI

MNI median forecast: +0.5% m/m, +2.2% y/y
MNI forecast range: +0.4% to +0.8% m/m

January: -0.4% m/m, +2.1% y/y
—

BERLIN (MNI) – Consumer prices in the western German state of Hesse
rose 0.8% in February, lifting the annual inflation rate to +2.2% from
+1.9% in January, the state statistics office said Tuesday.

As in the eastern states of Saxony and Brandenburg, the monthly
result in Hesse was above the median forecast of +0.5% for pan-German
CPI in a MNI survey of analysts.

During the winter holiday season, prices for package holiday tours
spiked 9.4% on the month, while restaurant and hotel services climbed
0.7%.

On the energy side, heating oil was up 3.9% on the month, motor
fuel rose 2.6%, electricity climbed 1.1% while gas remained unchanged.

Food prices climbed 1.5% on the month, with seasonal produce up
5.1%. Alcoholic drinks and tobacco products were up 0.8%. Clothing and
shoes increased by 2.2%.

Annual price developments were driven mainly by energy price
increases, with heating oil up 16.6%, motor fuel up 8.9%, gas up 5.0%
and electricity up 1.6%.

Package holiday tours were up 4.5% on the year, hotel and
restaurant services increased 2.9%.

Food prices climbed 3.1% on the year, with seasonal produce down
3.2%. Clothing and shoes rose 1.9%.

CPI ex-energy, seasonal produce and seasonal services was up 0.3%
on the month and 1.5% higher on the year.

Inflation is expected to slow in the near term on the back of
weaker domestic and global economic growth and energy base effects.

“Assuming slower energy-price inflation, year-on-year inflation
should tend to moderate from its present level over the next few
months,” the Bundesbank predicted earlier this month.

The German Finance Ministry last week projected inflation to slow
this year due to declining imported price pressures and an expected more
moderate rise in unit labor costs.

The economic panel of the German Banking Association (BDB),
consisting of the chief economists of the main private banks in Germany,
last week forecast German inflation of 1.7% this year and 1.8% next
year. The OECD forecast earlier this month HICP harmonized inflation for
Germany of 1.6% in 2012 and 1.5% in 2013.

For detailed information see data table on MNI MainWire.

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

[TOPICS: M$G$$$,MAGDS$,M$X$$$,M$XDS$,MT$$$$]

FRANKFURT (MNI) – The European Central Bank called Tuesday for bids
on a one-day refinancing operation at a fixed rate of 1.0%

Bids for the refis are due by 0905 GMT on Tuesday. The central bank
did not give a preset amount for this operation.

The 1-day refis will settle this Wednesday and expire on March 1,
2012.

– Frankfurt bureau: +49 69 720 142; email: frankfurt@marketnews.com –

[TOPICS: M$$CR$,M$X$$$,M$XDS$,MN$MM$,M$$EC$]

In recent trade.  We’re at 1.3453 presently.  Guess we can call it  profit taking.

 I reported Eastern European selling in early trading, just like yesterday. And yesterday I reported Russian name particular seller of EUR/USD during morning session.

Well today I’ve heard Gazprom was notable seller early. Using my highly-tuned analytical skills I’d hazard a guess notable Russian seller yesterday was indeed…….wait for it……..Gazprom.  Better late than never, hey what 

Apparently Gazprom selling euros against rubles, so sounds like……repatriation of profits!!!

UPDATE:  1.3435 offered!!! 

EUR/CHF sits at 1.2048, some 7 pips easier from when I started out.

Barrier option interest sits at 1.2025 and ofcourse 1.2000.

SNB interim head honcho Jordan speaks later this evening (18:30 GMT) in Zurich.  Might be giving instructions on how to make his favourite alpine muesli for all I know,  but it’s been noted.

FRANCE DATA: Nov-Jan sa housing starts +8.4% q/q; nsa +28.5% y/y
- Nov-Jan sa housing permits -0.3% q/q, nsa +21.9% y/y