Weaker than Reuter’s median forecast of 94.2.

Business climate -0.52, weaker than Reuter’s median forecast of -0.30.

EUR/USD sits at 1.3235,  BIS having been good for a few pips

Meanwhile cable sits at 1.6197, the “good names” reputation still just about intact

FRANKFURT (MNI) – The Eurozone needs a common bank supervisor and
resolution fund to allow it to reap the full benefits of financial
integration, European Central Bank Vice President Vitor Constancio said
Thursday at an ECB conference on financial integration and stability.

Policy-makers have already initiated a number of key initiatives
that should help ensure further financial integration in the future,
Constancio said, citing reforms on economic governance, the fiscal
compact and larger financial backstops.

“Looking forward there is something that is still missing in this
set of reforms – the element of banking union in the process of monetary
union that we have started. We have talked a lot about the embryonic
fiscal union…but there is an element that is in a way still
undeveloped which has to do with banking union,” Constancio said.

“We cannot have financial integration and reap the benefits of
financial integration if at the same time we don’t make sure that the
banking sector is regulated, is supervised, is resolved in a European
perspective,” he continued.

The Eurozone needs cross-border banking institutions, cross-border
supervision, as well as a common European resolution fund, Constancio
said.

–Frankfurt newsroom +49 69 72 01 42; e-mail jtreeck@marketnews.com

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

FRANKFURT (MNI) – The recent crises have led to a considerable
slowdown in financial market integration in the euro zone and
significantly impaired the transmission of monetary policy, the European
Central Bank said Thursday.

“In this environment, the monetary transmission process of the euro
area ceased to function properly, i.e. to convey balanced and
homogeneous signals to the euro area economy as a whole in response to
monetary policy decisions,” the ECB said in a report on financial
integration.

“Given the key role played by the banking sector in the financing
of the euro area economy, the impairment of transmission through banks
is of particular concern; nonetheless, a similar phenomenon has occurred
also for market-based financing,” the central bank noted.

The ECB listed a number of crisis-related effects on the
pass-through of interest rate decision to the real economy, known as the
“interest rate channel.”

“Overall, these crisis-induced changes have partly suspended the
smooth translation of the monetary policy stance into the financing
conditions of the real sector, making the process less robust and
predictable,” the ECB said. It noted the “higher degree of
heterogeneity” between countries and individual issuers.

“Thus, the pass-through of changes in key policy interest rates to
money market interest rates and the functioning of the bank lending
channel were affected, although this was in part mitigated by the
Eurosystem’s standard and non-standard monetary policy measures,” the
central bank’s report said.

The ECB warned that banks’ need to deleverage could also hamper
monetary policy transmission throughout the monetary union.

“Therefore, in order to facilitate the smooth transmission of the
monetary policy stance across euro area countries and credit
intermediation by euro area banks to the real sector, various targeted
policy measures, particularly measures aimed at improving banks’ access
to funding and their liquidity positions, have been introduced during
the crisis,” the ECB said.

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

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

FRANKFURT (MNI) – Financial integration remains a very important
component of European integration, European Central Bank Vice President
Vitor Constancio said Thursday at an ECB conference on financial
integration and stability.

“Financial integration remains a very important component of
European integration…financial integration is a necessary component of
a well-functioning monetary union,” Constancio said.

He cautioned that the Eurozone’s sovereign debt crisis has lead to
a reversal of previous integration trends, noting particular
fragmentation across national borders in sovereign and corporate bond
markets.

To allow for a stable and successful monetary union, “it is very
important that for the European process we keep alive this objective of
financial integration,” Constancio said.

The ECB is due to release its 2011 Financial Integration Report at
1045 CET.

–Frankfurt newsroom +49 69 72 01 42; e-mail jtreeck@marketnews.com

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

NRW CPI

April: +0.2% m/m, +1.7% y/y
March: +0.4% m/m, +1.8% y/y
—
Pan-German CPI

MNI median forecast: +0.1% m/m, +2.0% y/y
MNI forecast range: -0.1% to +0.2% m/m

March: +0.3% m/m, +2.1% y/y
—

BERLIN (MNI) – Consumer prices in the western German state of North
Rhine-Westphalia rose 0.2% in April, dampening the annual inflation rate
to +1.7% from +1.8%, the state statistics office said Thursday.

The monthly result is above the median forecast of +0.1% for
pan-German CPI in a MNI survey of analysts. Earlier today, Hesse and
Brandenburg also posted inflation rates of 0.2%, while Saxony tabled
0.1%.

Downward pressure on inflation in NRW came from food prices, which
fell 0.2% on the month, with seasonal produce down 1.1%.

Monthly energy cost trends were mixed, with motor fuel up 1.3%,
electricity up 0.5% and gas up 0.2%, while heating oil fell a marked
2.1%.

Clothing and shoes were up 0.5% on the month. Prices for package
holiday tours rose 0.8% on the month. Restaurant and hotel services were
up 0.3%.

Annual price developments were again driven by energy price
increases, with motor fuel up 7.7%, gas up 6.5%, heating oil up 5.5% and
electricity up 3.4%.

Food prices climbed 2.7% on the year, with seasonal produce down a
marked 2.3%. Alcoholic drinks and tobacco products increased by 3.9%.
Clothing and shoes were up 3.4%. Package holiday tours rose 4.4% and
hotel and restaurant services climbed 3.1%.

CPI excluding heating oil and motor fuel was up 0.2% on the month
and 1.5% higher on the year.

Due to sticky high oil prices, analysts expect annual inflation to
be above 2% over the next months.

Economics Minister Philipp Roesler on Wednesday said there is “no
acute inflation problem” but warned that inflation could become a risk
for the economic upswing. Wage deals this year will likely remain
reasonable, he reckoned.

“The ECB has our support so that it can return to its normal mode
of monetary policy and can concentrate on its clear mandate, assuring
price stability,” Roesler said.

In its updated economic outlook released Wednesday, the government
projected average inflation rates of 2.3% this year and 1.9% next year.

Germany’s leading economic research institutes said last week that
due to rising capacity utilisation rates and increasing tightness of
labor supply, wage and price pressures would increase markedly.

“We don’t see a wage-price spiral yet, but the risk absolutely
exists,” Joachim Scheide, the chief economist of the Kiel-based IfW
institute, said at a press conference on presenting the joint forecasts.
CPI is projected to rise by 2.3% this year and by 2.2% next year.

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$$$$]

LONDON (MNI) – March mortgage approvals fell markedly in March,
hitting their lowest level since May last year, according to the latest
British Bankers’ Association data.

The forward looking approvals data show weakening demand for
mortgage with the stamp duty, or property transaction tax, holiday
ending during the month. The number of approvals for house purchases in
March fell to 31,888 from 32,840 in February, the lowest outturn since
the 31,152 recorded last May.

The value of loans approved in March fell to Stg4.936 billion from
Stg5.084 billion in February, the lowest reading since last September.

The BBA noted gross mortgage lending, at Stg8.3 billion in March,
was still 6.1% up on the year earlier and in line with the recent six
month average.

The weakness is more apparent in the forward looking approvals
data.

–London Bureau; Tel: +44207862 7491; email: drobinson@marketnews.com

[TOPICS: MABDS$,M$B$$$]

UK DATA: BBA: Mar sa mortgage approvals 31,888 vs 32,840 Feb
UK BBA Mar sa Remortgage approvals 19,751 vs 18,395 Feb
UK BBA: Mar House purchase loans stg4.936bn vs stg5.084bn Feb
UK BBA: Mar Mortgage approvals lowest since May 2011
————————————————————————
March mortgage approvals fell markedly in March, hitting their
lowest level since May last year, according to the latest British
Bankers’ Association data. The forward looking approvals data show
weakening demand for mortgage with the stamp duty, or property
transaction tax, holiday ending during the month. The number of
approvals for house purchases in March fell to 31,888 from 32,840 in
February, the lowest outturn since the 31,152 recorded last May.

Down from 32,840 in February.  Lowest since April 2011.

On the otherhand, net mortgage lending+904 mln in March, up from +659 mln in February. Highest since July 2011.

In recent trade.

Wondered where they’d got to.

We’re at 1.3252 from session high 1.3263.

FRANKFURT (MNI) – Financial integration is key for balanced
monetary and financial conditions and helps to ensure a smooth
transmission of monetary policy, European Central Bank President Mario
Draghi said Thursday.

In opening remarks to the central bank’s Financial Integration and
Stability conference, Draghi noted that prior to the crisis, “it was
widely assumed that financial integration was a continuous process.” But
the crisis has reversed that trend, he said.

“To preserve the benefits of single markets, decisive action has
since been taken in different directions,” Draghi said, citing among
other things the European Commission’s six pack, the European Stability
Mechanism and substantial reform to supervision, pushing it to a
European level.

“It is crucial that the current initiative be completed, Draghi
said.

–Frankfurt newsroom +49 69 72 01 42; e-mail jtreeck@marketnews.com

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

Hesse CPI

April: +0.2% m/m, +1.9% y/y
March: +0.2% m/m, +2.0% y/y
—
Pan-German CPI

MNI median forecast: +0.1% m/m, +2.0% y/y
MNI forecast range: -0.1% to +0.2% m/m

March: +0.3% m/m, +2.1% y/y
—

BERLIN (MNI) – Consumer prices in the western German state of Hesse
rose 0.2% in April, dampening the annual inflation rate to +1.9% from
+2.0%, the state statistics office said Thursday.

The monthly result is above the median forecast of +0.1% for
pan-German CPI in a MNI survey of analysts.

Monthly energy cost trends were mixed, with motor fuel up 1.0% and
gas and electricity both up 0.1%, while heating oil fell a marked 2.8%.

Food prices rose 0.3% on the month, with seasonal produce also up
0.3%. Clothing and shoes were up 0.2%. Prices for package holiday tours
rose 0.8% on the month. Restaurant and hotel services were up 0.1%.

Annual price developments were again driven by energy price
increases, with motor fuel up 5.5%, gas up 4.6%, heating oil up 4.5% and
electricity up 2.9%.

Food prices climbed 3.7% on the year, with seasonal produce up
0.3%. Alcoholic drinks and tobacco products increased by 4.0%. Clothing
and shoes were up 3.0%. Package holiday tours rose 4.4% and hotel and
restaurant services climbed 3.2%.

CPI excluding heating oil and motor fuel was up 0.2% on the month
and 1.8% higher on the year.

Due to sticky high oil prices, analysts expect annual inflation to
be above 2% over the next months.

Economics Minister Philipp Roesler on Wednesday said there is “no
acute inflation problem” but warned that inflation could become a risk
for the economic upswing. Wage deals this year will likely remain
reasonable, he reckoned.

“The ECB has our support so that it can return to its normal mode
of monetary policy and can concentrate on its clear mandate, assuring
price stability,” Roesler said.

In its updated economic outlook released Wednesday, the government
projected average inflation rates of 2.3% this year and 1.9% next year.

Germany’s leading economic research institutes said last week that
due to rising capacity utilisation rates and increasing tightness of
labor supply, wage and price pressures would increase markedly.

“We don’t see a wage-price spiral yet, but the risk absolutely
exists,” Joachim Scheide, the chief economist of the Kiel-based IfW
institute, said at a press conference on presenting the joint forecasts.
CPI is projected to rise by 2.3% this year and by 2.2% next year.

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$$$$]

Brandenburg CPI

April: +0.2% m/m, +2.1% y/y
March: +0.2% m/m, +2.1% y/y
—
Pan-German CPI

MNI median forecast: +0.1% m/m, +2.0% y/y
MNI forecast range: -0.1% to +0.2% m/m

March: +0.3% m/m, +2.1% y/y
—

BERLIN (MNI) – Consumer prices in the eastern German state of
Brandenburg rose 0.2% in April, leaving the annual inflation rate
unchanged at +2.1%, the state statistics office said Thursday.

The monthly result is above the median forecast of +0.1% for
pan-German CPI in a MNI survey of analysts.

Monthly energy cost trends were mixed, with motor fuel up 1.4% and
gas up 0.3%, while electricity was down 0.1% and heating oil fell 1.4%.

Food prices rose 0.4%, with seasonal produce down 1.4%. Clothing
and shoes were up 0.2%.

Prices for package holiday tours rose 0.8% on the month. Restaurant
and hotel services were up 0.6%.

Annual price developments were again driven by energy price
increases, with gas up 8.0%, heating oil up 6.4%, motor fuel up 5.0% and
electricity up 1.6%.

Food prices climbed 3.9% on the year, with seasonal produce down
0.8%. Alcoholic drinks and tobacco products increased by 4.3%. Clothing
and shoes were up 3.2%. Package holiday tours rose 4.4% and hotel and
restaurant services climbed 2.7%.

CPI excluding heating oil and motor fuel was up 0.2% on the month
and 1.9% higher on the year.

Due to sticky high oil prices, analysts expect annual inflation to
be above 2% over the next months.

Economics Minister Philipp Roesler on Wednesday said there is “no
acute inflation problem” but warned that inflation could become a risk
for the economic upswing. Wage deals this year will likely remain
reasonable, he reckoned.

“The ECB has our support so that it can return to its normal mode
of monetary policy and can concentrate on its clear mandate, assuring
price stability,” Roesler said.

In its updated economic outlook released Wednesday, the government
projected average inflation rates of 2.3% this year and 1.9% next year.

Germany’s leading economic research institutes said last week that
due to rising capacity utilisation rates and increasing tightness of
labor supply, wage and price pressures would increase markedly.

“We don’t see a wage-price spiral yet, but the risk absolutely
exists,” Joachim Scheide, the chief economist of the Kiel-based IfW
institute, said at a press conference on presenting the joint forecasts.
CPI is projected to rise by 2.3% this year and by 2.2% next year.

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$$$$]

ITALY DATA: April business confidence fell to 89.5 from a
downwardly-revised 91.1 in March on worsening output expectations, with
the index hitting the lowest level since October 2009, ISTAT said (Oct
2009 88.9). –April current orders were stable at a two-year low of -39,
while the 3-month outlook for output fell to -3 from +1 in March.
–Current inventory levels remained at +1 (March +1)

From revised 91.1 in March (prev 92.1). weaker than Reuter’s median forecast of 92.1.

Lowest read since October 2009!!!

Just being told “good names” seen buying cable in the 1.6195/00 area.

We’re at 1.6198 at writing.

We’ll see just how “good” they are in the fullness of time.

I don’t quite get this ongoing enthusiasm for sterling, I must be missing something. Or maybe I’m just plain stoopid.

It wouldn’t surprise me to see the “good names” reputation tarnished.

Buy stops, as aforementioned, gathered up at 1.6210/20.

There ya go Banya

1.6200 barrier option interest in cable is toast.  I guess there was a certain inevitability about it.

Session high 1.6203.

Elsewhere, EUR/USD barrier interest at 1.3250 under severe attack, session high so far 1.3248.

UPDATE:  1.3251 session high.  My cup runneth over.

Saxony CPI

April: +0.1% m/m, +2.0% y/y
March: +0.3% m/m, +2.2% y/y
—
Pan-German CPI

MNI median forecast: +0.1% m/m, +2.0% y/y
MNI forecast range: -0.1% to +0.2% m/m

March: +0.3% m/m, +2.1% y/y
—

BERLIN (MNI) – Consumer prices in the eastern German state of
Saxony rose 0.1% in April, dampening the annual inflation rate to +2.0%
from +2.2%, the state statistics office said Thursday.

The monthly result is in line with the median forecast for
pan-German CPI in a MNI survey of analysts.

Downward pressure on monthly inflation came from food prices, which
fell 0.2%, with seasonal produce down 1.6%. Clothing and shoes were
unchanged on the month.

Monthly energy cost trends were mixed, with motor fuel up 0.9% and
gas up 0.1%, while electricity was down 0.1% and heating oil fell 1.6%.

Prices for package holiday tours rose 0.8% on the month. Restaurant
and hotel services were up 0.3%.

Annual price developments were again driven by energy price
increases, with gas up 7.5%, heating oil up 6.9%, motor fuel up 5.2% and
electricity up 1.1%.

Food prices climbed 2.5% on the year, with seasonal produce down
2.7%. Alcoholic drinks and tobacco products increased by 4.0%. Clothing
and shoes were up 4.4%. Package holiday tours rose 4.4% and hotel and
restaurant services climbed 1.5%.

CPI excluding heating oil and motor fuel was up 0.1% on the month
and 1.8% higher on the year.

Due to sticky high oil prices, analysts expect annual inflation to
be above 2% over the next months.

Economics Minister Philipp Roesler on Wednesday said there is “no
acute inflation problem” but warned that inflation could become a risk
for the economic upswing. Wage deals this year will likely remain
reasonable, he reckoned.

“The ECB has our support so that it can return to its normal mode
of monetary policy and can concentrate on its clear mandate, assuring
price stability,” Roesler said.

Its updated economic outlook released Wednesday, the government in
projected average inflation rates of 2.3% this year and 1.9% next year.

Germany’s leading economic research institutes said last week that
due to rising capacity utilisation rates and increasing tightness of
labor supply, wage and price pressures would increase markedly.

“We don’t see a wage-price spiral yet, but the risk absolutely
exists,” Joachim Scheide, the chief economist of the Kiel-based IfW
institute, said at a press conference on presenting the joint forecasts.
CPI is projected to rise by 2.3% this year and by 2.2% next year.

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$$$$]

Their call yesterday to sell the EUR/GBP cross in the .8210/20 area proved most prescient. 

You gotta luv ‘em, don’t ya?

We’re at .8170 presently having been as low as 8167.

Talk of .8150 barrier option interest in place.

We’re at 1.6187.

Looking ominous…….

May even get to put up a pop goes the weasel headline if I’m lucky