Above 1.2700 in recent trade.

We’re at 1.2702 having been as high as 1.2707.

Sharp fall from -4 in May and demonstrably weaker than median forecast of -15.

Incentive for the SNB,  as if it needs it, to hold the 1.2000 peg.

-BOE MPC Voted 5-4 at Jun meeting for unchanged QE
-BOE MPC King, Miles, Posen voted for stg50bn extra QE in Jun
-BOE MPC Fisher voted for stg25bn extra QE in Jun
-BOE MPC Voted 9-0 to keep Bank Rate at 0.5%
-BOE MPC Judged Bank Rate cut had no advantages over more QE

LONDON (MNI) – The Bank of England Monetary Policy Committee came
very close to relaunching quantitative easing in June, with the minutes
showing a five-to-four split in favour of unchanged policy with Governor
Mervyn King in the minority voting for fresh QE.

The minutes of the June meeting revealed King, David Miles and Adam
Posen all voted for an extra Stg50 billion in QE, with Executive
Director Markets Paul Fisher voting for a further Stg25 billion. There
was discussion over cutting Bank Rate from 0.5%, but the MPC voted nine
to zero against it, arguing that at present it had no advantages over
more QE.

Money markets have been pricing in a Bank Rate cut, but the MPC
remains skeptical over the merits of lowering the rate from 0.5%.

“A reduction of Bank Rate below 0.5% might squeeze some lenders’
interest margins to such an extent that they became even less able to
extend new credit,” the minutes said.

The MPC will keep the question of cutting Bank Rate under review
but the minutes said “Overall, the Committee judged that, at the present
time, a further reduction in Bank Rate would have not have any
advantages over an expansion of the asset purchase programme.”

The majority on the MPC took the view that it was better to wait
and see how euro area events unfolded before backing more stimulus,
although extra stimulus was likely to become necessary further down the
line.

“While acknowledging that further stimulus was likely to become
warranted at some point, most members noted that there were several key
events occurring over the coming weeks that could have a material
bearing on the situation in the euro area and that there was merit in
waiting to see how matters evolved before the MPC reached a conclusion
on whether to add any further monetary stimulus,” the minutes said.

The MPC noted that the euro area crisis was feeding through to
higher bank funding costs in the UK. This was creating a “significant
current impediment” to the country’s economic recovery.

Mortgage and other interest rate spreads had risen because of this
but King told the MPC at the June 6 and 7 meeting that the BOE was
already working on new bank funding plans with the Treasury, and these
were unveiled in last week’s Mansion House speech.

On the economic outlook, the MPC agreed “that the upside risks to
inflation had lessened.”

They cited the fall in commodity prices, but said there was a risk
that inflation expectations might not fall as quickly as expected.

Downside risks had increased, with the near term outlook for the UK
economy softening and that “the risks to UK and global activity from
financial distress and political tension within the euro area had
intensified again.”

Even if a disorderly outcome in the euro area could be avoided “the
ongoing threat of such an event would continue to weigh on economic
activity in the UK.”

It was against this background that King and three of his
colleagues voted for more QE, while the majority took a wait-and-see
approach.

-London newsroom: Tel: +44 207 862 7491; e-mail:drobinson@marketnews.com

[TOPICS: M$$BE$,MT$$$$]

–Adds Comments By German Finance Minister Wolfgang Schaeuble

BERLIN (MNI) – Finland opposes any easing of the conditions of the
reform program for Greece, Finnish Finance Minister Jutta Urpilainen
told German regional daily Rheinische Post in a newspaper interview
published Wednesday.

“What has been agreed must be adhered to,” Urpilainen was quoted by
the paper. “This has already been the very clear message to Greece,” she
said.

German Finance Minister Wolfgang Schaeuble told German weekly Die
Zeit in an interview to be published Thursday that “we did not ask too
much of Greece and we won’t ask too much of Greece.”

The parliamentary leader of German Chancellor Angela Merkel’s
center-right CDU/CSU bloc, Volker Kauder, told Spiegel online on
Wednesday that giving Greece more time to meet its fiscal consolidation
goals would cost a lot of money. Kauder said he does not think that “we
will come to changes here.”

ECB Executive Board member Joerg Asmussen, a German national, said
Monday it was too early to tell if Greece should be allowed more time to
meet its goals. One must first see how the new government judges the
state of the economy and the progress on reforms, he explained. Asmussen
also warned that giving Greece more time meant automatically that “there
will be an additional external financial need.”

A senior EU official said Tuesday that Eurozone finance ministers
are expected to open talks on modifying the details of Greece’s second
bailout program because months of political paralysis in the country
have caused reforms to stall.

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

[TOPICS: M$X$$$,MGX$$$,M$$CR$,M$Y$$$,MT$$$$,M$G$$$]

FRANKFURT (MNI) – Eurobills do not offer a way out of the
confidence crisis in Europe, European Central Bank Governing Council
member Jens Weidmann said in an interview with German monthly manager
magazin released on Wednesday.

Weidmann said he had not seen any concrete proposals for eurobills
from the European Commission yet.

“The eurobills described in the media seem to be the next attempt
after eurobonds to promote the comprehensive mutualization of risk
without a decision on such a course being embedded in a consistent
framework of the currency union or compatible with the existing legal
framework,” Weidmann told the magazine.

“Such a strategy is in my view not appropriate for overcoming the
crisis of confidence,” Weidmann asserted.

“Fear of possible contagion cannot and must not make Europe
vulnerable to blackmail,” Weidmann said, adding that Greece’s future
Eurozone membership is in the hands of the country itself.

“Decisive for further developments in Greece is whether the reform
program is implemented. It is the basis for the further granting of
financial aid, and only the reforms put Greece in position to stand
again on its own legs. Nothing has changed about this because of the
election,” Weidmann said.

– Frankfurt newsroom: +49-69-720142; email: frankfurt@marketnews.com

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

-BOE MPC Voted 5-4 at Jun meeting for unchanged QE
-BOE MPC King, Miles, Posen voted for stg50bn extra QE in Jun
-BOE MPC Fisher voted for stg25bn extra QE in Jun
-BOE MPC Voted 9-0 to keep Bank Rate at 0.5%
-BOE MPC Judged Bank Rate cut had no advantages over more QE

LONDON (MNI) – The Bank of England Monetary Policy Committee came
very close to relaunching quantitative easing in June, with the minutes
showing a five-to-four split in favour of unchanged policy with Governor
Mervyn King in the minority voting for fresh QE.

The minutes of the June meeting revealed King, David Miles and Adam
Posen all voted for an extra Stg50 billion in QE, with Executive
Director Markets Paul Fisher voting for a further Stg25 billion. There
was discussion over cutting Bank Rate from 0.5%, but the MPC voted nine
to zero against it, arguing that at present it had no advantages over
more QE.

Money markets have been pricing in a Bank Rate cut, but the MPC
remains skeptical over the merits of lowering the rate from 0.5%.

“A reduction of Bank Rate below 0.5% might squeeze some lenders’
interest margins to such an extent that they became even less able to
extend new credit,” the minutes said.

The MPC will keep the question of cutting Bank Rate under review
but the minutes said “Overall, the Committee judged that, at the present
time, a further reduction in Bank Rate would have not have any
advantages over an expansion of the asset purchase programme.”

The majority on the MPC took the view that it was better to wait
and see how euro area events unfolded before backing more stimulus,
although extra stimulus was likely to become necessary further down the
line.

“While acknowledging that further stimulus was likely to become
warranted at some point, most members noted that there were several key
events occurring over the coming weeks that could have a material
bearing on the situation in the euro area and that there was merit in
waiting to see how matters evolved before the MPC reached a conclusion
on whether to add any further monetary stimulus,” the minutes said.

The MPC noted that the euro area crisis was feeding through to
higher bank funding costs in the UK. This was creating a “significant
current impediment” to the country’s economic recovery.

Mortgage and other interest rate spreads had risen because of this
but King told the MPC at the June 6 and 7 meeting that the BOE was
already working on new bank funding plans with the Treasury, and these
were unveiled in last week’s Mansion House speech.

-London newsroom: Tel: +44 207 862 7491; e-mail:drobinson@marketnews.com

[TOPICS: M$$BE$,MT$$$$]

–Adds Comments By Merkel’s Parliamentary Leader To Story Sent 06:54 GMT

BERLIN (MNI) – Finland opposes any easing of the conditions of the
reform program for Greece, Finnish Finance Minister Jutta Urpilainen
told German regional daily Rheinische Post in a newspaper interview
published Wednesday.

“What has been agreed must be adhered to,” Urpilainen was quoted by
the paper. “This has already been the very clear message to Greece,” she
said.

The parliamentary leader of German Chancellor Angela Merkel’s
center-right CDU/CSU bloc, Volker Kauder, told Spiegel online on
Wednesday that giving Greece more time to meet its fiscal consolidation
goals would cost a lot of money. Kauder said he does not think that “we
will come to changes here.”

ECB Executive Board member Joerg Asmussen, a German national, said
Monday it was too early to tell if Greece should be allowed more time to
meet its consolidation and reform goals. One must first see how the new
government judges the state of the domestic economy and the progress on
reforms, he explained. Asmussen also warned that giving Greece more time
meant automatically that “there will be an additional external financial
need.”

A senior EU official said Tuesday that Eurozone finance ministers
are expected to open talks on modifying the details of Greece’s second
bailout program because months of political paralysis in the country
have caused reforms to stall.

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

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

-BOE MPC Voted 5-4 at Jun meeting for unchanged QE
-BOE MPC King, Miles, Posen voted for stg50bn extra QE in Jun
-BOE MPC Fisher voted for stg25bn extra QE in Jun
-BOE MPC Voted 9-0 to keep Bank Rate at 0.5%
-BOE MPC Lookd at merits of cutting Bank Rate
-BOE MPC Judged bank rate cut had no advantages over more QE

LONDON (MNI) – The Bank of England Monetary Policy Committee came
very close to relaunching quantitative easing in June, with the minutes
showing a five-to-four split in favour of unchanged policy with
Governor Mervyn King in the minority voting for fresh QE.

The minutes of the June meeting revealed King, David Miles and Adam
Posen all voted for an extra Stg50 billion in QE, with Executive
Director Markets Paul Fisher voting for a further Stg25 billion. There
was discussion over cutting Bank Rate from 0.5%, but the MPC voted nine
to zero against it, arguing that at present it had no advantages over
more QE.

The majority on the MPC took the view that it was better to wait
and see how euro area events unfolded before backing more stimulus,
although extra stimulus was likely to become necessary.

“While acknowledging that further stimulus was likely to become
warranted at some point, most members noted that there were several key
events occurring over the coming weeks that could have a material
bearing on the situation in the euro area and that there was merit in
waiting to see how matters evolved before the MPC reached a conclusion
on whether to add any further monetary stimulus,” the minutes said.

The MPC noted that the euro area crisis was feeding through to
higher bank funding costs in the UK. This was creating a “significant
current impediment” to the country’s economic recovery.

Mortgage and other interest rates spread had risen because of
this, but King told the MPC the BOE was already working on new bank
funding plans with the Treasury, and these were unveiled in last week’s
Mansion House speech.

-London newsroom: Tel: +44 207 862 7491; e-mail:
drobinsons@marketnews.com

[TOPICS: M$$BE$,MT$$$$]

-May Claimant Count Unemployment +8,100 m/m; Rate 4.9%
-Apr Average Weekly Earnings total pay +1.4% vs 0.9% in Mar
-Feb-Apr ILO Unemployment -51,000; Rate %
-Apr Claimant Count revised to -12,800 from -13,700

LONDON (MNI) – Claimant count unemployment in May posted its first
rise since February, a sign that the recent economic turmoil has hit the
labour market, according to figures released by National Statistics
Wednesday.

While the less timely ILO data show unemployment continuing to fall
and employment growing strongly, the renewed rise in the claimant count
could prove to be a turning point with growth set to remain weak ahead.
The data are also likely to reinforce the growing expectation that the
Bank of England will carry out further Quantatative Easing at the July
Monetary Policy Committee meeting.

The claimant count, which measures the number of people claiming
Job Seekers Allowance, rose 8,100 on the month in May following a
revised 12,800 fall in April. Analysts had expected to see a small fall
of 4,400 on the month.

The number of men claiming Job Seekers Allowance rose 8,700 on the
month, while women fell 600.

Data in recent months has rather surprisingly showed the claimant
count falling from a peak of 1.61 million in February. Analysts have
long forecast that unemployment would rise this year, and these latest
data seem more in line with the current poor rate of economic growth.

The official Labour Force measure of unemployment, based on the
ILO measure, fell 51,000 in the three months to April compared with the
previous three month period, although was still up 185,000 on the year.

There was also a strong increase in employment, which was up
166,000 in the latest three months, the largest gain since June-August
2010.

Average weekly earnings growth rose to 1.4% in the three
months to April compared with the previous year, from 0.9% in
March, the largest rise since December, but still at very low levels. It
was, though, well above the median forecast for a 0.9% rise.

Regular average weekly earnings ticked up to 1.8% from 1.6%, in
line with the median forecast.

-London bureau: 00 44 207 862 7491 e:mail: puglow@marketnews.com

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

UK DATA: May Claimant Count Unemployment +8,100 m/m; Rate 4.9%
-Apr Average Weekly Earnings total pay +1.4% vs 0.9% in Mar
-Feb-Apr ILO Unemployment -51,000; Rate %
-Apr Claimant Count revised to -12,800 from -13,700
————————————————————————
Claimant count unemployment in May posted its first rise since Feb,
a sign that the recent economic turmoil has hit the labour market. The
claimant count, which measures the number of people claiming Job
Seekers Allowance, rose 8,100 on the month in May following a revised
12,800 fall in April. Analysts had expected a fall of 4,400 on the
month. While the less timely ILO data show unemployment continuing to
fall and employment growing strongly, the renewed rise in the claimant
count could prove to be a turning point with growth set to remain weak
ahead. The data are also likely to reinforce the growing expectation
that the BOE will carry out further QE at the July MPC meeting.

Weaker than Reuter’s median poll of -3,000. Claimant count rate of 4.9%, in line with median forecast.

Ilo jobless -51,000 in 3 months to April, rate of 8.2% in line with median forecast.

• BOE’s King, Posen and Miles voted to increase £50 bln, Fisher voted for £25 bln
• Vote to keep interest rates on hold was 9-0
• Most thought further stimulus was needed or would probably be needed
• All agreed risks to inflation were shifting to the downside
• Recent wage data and falls in commodity prices suggest weaker near-term inflation outlook
• Discussed changing bank reserve renumeration with BOE, but saw drawbacks
• So no advantages of cutting rates over increasing QE
• Risk to UK and rest of the world increasing as a result of the EU crisis

• German yields at abnormally low levels
• French bonds don’t offer good risk-return profile

The Munich based head of Pimco porfolio management in Germany was speaking in an interview on Bloomberg TV

• If Troika decides Greece programme has derailed, up to Greece to bring it back on track
• Bundesbank’s critical view on govt bond purchases is known, politicians need to solve crisis
• Not in favour of euro bills

Standard fare from the uncompromising Bundesbanker…….

EUR/USD effectively unchanged on the day, presently at 1.2680.

Love him or loathe him, latest from AEP at The Telegraph.

ITALY DATA: April industrial orders fell 1.9% m/m in seasonally-
adjusted terms on a steep fall in foreign orders and a contraction in
domestic orders, registering the third m/m decline this year, ISTAT
said. On the year, unadjusted industrial orders fell 12.3%, up from a
low of -14.3% in March when the index posted the steepest y/y fall since
August 2009.
– April SA m/m domestic orders -0.3%; foreign orders -15.3% m/m
– April SA turnover: -0.5% m/m; workday adjusted -4.1% y/y
– See MNI MainWire for details

Not great after March ‘s +3.5% , but better than expectations of -3.5%

Industrial Sales  sa -0.5%m/m from flat in March, work-day adj -4.1% y/y

Down from -38 pts in May

After their crappy football team cost me money at euro 12, I don’t care a jot that their confidence is on the wane

EUR/USD comatose at 1.2683.

Anyone would think the market was waiting for something later in the day………

The likely 3rd party in a 3 way coalition  have given their support to the new administration, but won’t supply any members for its cabinet, looking likely to  suggest some of the existing caretaker administration members such as the Interior and Labour ministers  remain in office…

More..

• Spain hasn’t been rescued, doesn’t need to be
• Bank bailout to help banks sell assets
• Euro project must be reinforced
• Decline in tax revenues is ‘damaging’
• Spain to pass anti-fraud bill in next weeks