Up from revised 10.6 in December (prev 10.4%).  Demonstrably worse than Reuter’s median forecast of 10.4%.

Doesn’t appear to have hurt single currency any, EUR/USD at 1.3343.

Euro zone February inflation 2.7% y/y, slightly above Reuter’s median forecast of 2.6%.

Projected amount was a total of  Eur 7-8 bln

Sold Eur 0.825 bln of 4.25% 2017 OAT, yield 1.91 % (from 2.42%), cover 4.115 (from 4.4)

Sold Eur 1,250 bln of 3.75% 2019 OAT, yield 2.48 % , cover 2.74

Sold Eur 3.915 bln of  3% 2022  OAT, yield  2.91 % (from 3.13%), cover 2.19 (from 1.71)

Sold Eur 2.001 bln of 3.5% 2026  OAT, yield 3.30 % (from 3.65%), cover 2.174 (from 3.24)

Better yields and  pretty much a full take up, but markets again showing little reaction…

EUR’s around 1.3345

In EUR/USD.

We sit at 1.3342.

Overnight Sean mentioned sell orders clustered up at 1.3360/70, buy stops through 1.3380.

On downside, 1.3295 (100 dma) lined up as first major support.

Sold:

Eur 1.061 bln  of 3.4% 2014 bono, yield 2.069 %, cover 2.81

Eur 1.91 bln of 4 % 2015 bono, yield 2.617% (vs 3.332%), cover 2.37 (from 2.19)

Eur 1.530 bln of 4.25% bono, yield 3.6765 (vs 3.455%), cover 2.59 (from 3.57)

Full amount taken up, but yields a bit mixed. market barely reacting on the results…

French auctions also today, with results due just after 1000GMT

Slow as molasses. I’m frustrated and annoyed……

Down from revised 52.0 (prev 52.1) in January and below Reuter’s median forecast of 51.8.

GERMAN DATA: German Jan machine orders -6% y/y; Dec -10%; nov -12%: VDMA

Talk of RHS 9:00 GMT fix interest in EUR/USD.

This will have helped fuel latest rallyette in EUR/USD.  As I’ve said a million times before, by the time you hear of these fix flows they’re alot of the time well on the way to having been fully front run.

UPDATE:  Case in point, slight dip in EUR/USD as fix time passes.  We’re not alot lower though when all said and done, presently at 1.3330.

Fractionally above flash estimate of 50.1.

Up from 46.8 in January and better than Reuter’s median forecast of 47.1.

Highest read since last September.

Meanwhile,  French February manufacturing PMI 50.0, up from 48.5 in January, but fractionally below 50.2 flash estimate.

Fraction below 45.1 in January and slightly weaker than Reuter’s median forecast of 45.5.

10th consecutive month of contraction.

New session low for EUR/USD at 1.3305.

Just picking up that Middle Eastern soveriegn selling being seen in USD/CHF, with more interest said to lie up at 9060/80 (we’re at 9055 presently).  Does than mean they’re gonna be selling dollars against the euro as well?  EUR/USD pairing could do with some help…..

As mentioned earlier, initial technical support of note lined up at 1.3295.

UPDATE:  1.3323 bid.  Who could have been buying? If you think it’s the Middle Eastern sovereigns think again. Talk is Eastern European buying notable in latest little spike.

UPDATE:  I find this very interesting as Eastern European names had been major EUR/USD sellers earlier in week.  Can anyone say “profit taking”

UPDATE:  Also you gotta remember the magnetic-effect of that lumpy 1.3340 vanilla option expiry I’m just joshing with ya

Circa 1.3310. Lending pairing some tenuous support. We’re at 1.3317 from session low 1.3307.

Well you knew they’d turn up at some juncture, didn’t ya?

Talk of large 1.3340 vanilla expiry later today, for what’s that worth. As regular readers will know I’m not a big fan of all that magnetic-effect mumbo jumbo….

FRANKFURT (MNI) – The recent increase of the European Central
Bank’s balance sheet to “unprecedented levels” has not contributed to
inflationary pressures in the Eurozone, former ECB Executive Board
member Lorenzo Bini Smaghi said in the Financial Times.

Rather, the ECB’s provision of cheap liquidity “has prevented a
sharp contraction in banks’ liabilities, which would have induced a
drastic deleveraging and possibly a credit crunch,” Bini Smaghi said in
an opinion piece published Wednesday evening.

“Money and credit statistics in the euro area confirm that there
are no inflationary pressures, while aggregate demand growth is expected
to be modest, if not negative; and below potential for some time,” he
added.

However, Bini Smaghi did underscore a “more serious concern”: that
the ECB’s three-year funding operation could lead to banks becoming
addicted to easy central bank funding and having less incentive to make
the necessary adjustments to their balance sheets.

“This can be prevented only if supervisors put sufficient pressure
on bank managers and shareholders to continue adjustment, and to use
central bank funds only as a temporary, exceptional source of
financing,” Bini Smaghi wrote. “However, supervision in the Eurozone is
implemented at national level, with little incentive to pursue these
objectives rigorously and on a level playing field.”

The former central banker urged a greater role for the ECB in both
coordinating and supervising the Eurozone’s banking system. “The euro
area needs a supervisory and regulatory compact, as much as – if not
more than – a fiscal compact,” he said.

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

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

LONDON (MNI) – UK house prices rose in February, adding to the
evidence provided by the latest Bank of England data, that the housing
market has picked-up.

House prices in the Nationwide series were up 0.6% on the month and
up 0.9% on the year in February. BOE data published Wednesday showed a
marked increase in mortgage approvals and the Nationwide figures
show house prices rising.

“Measures of activity in the housing market have … picked up,
with the number of housing transactions rising by 23% y/y in January and
the number of UK mortgage approvals – a leading indicator of sales – up
36%. However, it remains to be seen whether this trend will be
sustained,” Robert Gardner, Nationwide’s Chief Economist, said.

House asking price surveys have also shown marked rises. With the
stamp duty (property transaction tax) holiday set to end in March, some
of this pick-up may simply reflect housing activity being brought
forward.

–London newsroom: 4420 7862 7491; email drobinson@marketnews.com

[TOPICS: MABDA$,MABDS$]

UK DATA: Nationwide: Feb House Prices Up 0.6% m/m; Up 0.9% y/y
————————————————————————
UK house prices rose in February, adding to the evidence
provided by the latest Bank of England data, that the housing market
has picked-up.

Up from 48.3 in January. 

Contracts at slowest pace in four months.

Manufacturing output rises to 50.4 in February, up sharply from 47.3 in January.

First increase since October 2011.

Stronger than Reuter’s median forecasts of +0.2%, +0.4% respectively.

Dax futures down -0.4%, CAC 40 futures down -0.1%

Better than Reuter’s median forecasts -0.2%, +0.9% respectively.

Q3 data revised up, to +0.3% q/q from previous +0.2%  and +1.6% y/y from previous +1.3%.

Versus 3% EU limit.  Whoops.

Sees 2013 growth of 1.25% (compared to 1.3% forecast by Dutch central bank in December)

Sees 2012 government deficit of 4.5% of GDP  and 2012 GDP growth of -0.75%