Up to 22.5% from 22% in March, no great surprises there…

Better than Reuter’s median forecasts flat, -3.3% respectively.

Meanwhile April’s data revised downward,  to -1.1% m/m, -2.4% y/y from -0.8%, -2.3% previously.

LONDON (MNI) – Mortgage lending rebounded in May after the slump in
April, with the latter due to the expiry in March of the stamp duty
holiday.

Council of Mortgage Lenders data showed the number of house
purchase loans in May rose to 48,300, up 33% on the month and up 24% on
the year, with first-time buyers coming back in droves, with a 43%
increase from April.

The data appear to simply reflect the distortions caused by the
removal of the stamp duty, or property transaction tax, holiday rather
than any underlying pick-up in the UK housing market in recent months.
The CML noted first-time buyer lending was back at levels seen in the
second half of last year.

“It is positive news for the market that the slump following the
end of the stamp duty concession seems to have been short lived. Lending
is similar to late 2011 levels and showing a healthy improvement on the
same time last year,” Paul Smee, CML Director General said.

The CML data are based on mortgage advances – that is the amount
actually provided by lenders to property purchasers.

The June Bank of England personal lending data, which cover the
whole sector. will be published on July 30.

-London bureau: +4420 7862 7491; email: drobinson@marketnews.com

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

Blooooooooooooooooooooooooooooooooooooooooooow…………..

EUR/USD at 1.2215, only another 15 pips

I’m bored………….does it show

Meanwhile

Austria’s FinMin Fekter:  Does not at moment think Italy will need bailout

Phew…….

Wish I was in Florence right now. I love Florence………

Nearly time for a loooooooooooooooong holiday (yipeeeeeeeeeeeeeeeeeeeeeeeeeeeeeee)

For the 1000NY/1400GMT cut

EUR/USD: 1.2200, 1.2215, 1.2225, 1.2230 (large), 1.2400, 1.2550,

USD/JPY: 78.75, 79.00, 79.60, 79.85, 80.00

AUD/USD: 1.0150, 1.0200, 1.0300, 1.0350

EUR/AUD: 1.2065

GBP/USD: 1.5500

EUR/GBP: 0.7900, 0.8020, 0.8030, 0.8070

NZD/USD: 0.8000

Italian 2 year govt bond yield off 14 bps at 3.60%.

EUR/USD sits at 1.2220 in yet another morning of subdued trade.

FRANKFURT (MNI) – Eurozone construction activity is likely to
remain subdued, the European Central Bank said in its latest Monthly
Bulletin, citing recent short-term indicators.

The ECB noted “diverging developments” across the larger Eurozone
member states, with construction activity falling in France, Italy,
Spain and the Netherlands, while remaining stable in Germany.

“The mood in the euro area construction industry as a whole
reflects a subdued sentiment in the five largest euro area countries,
except Germany, where it is more positive,” the ECB said.

The central bank warned that fiscal measures in France and Italy,
including property tax hikes and the phasing-out of measures favouring
residential property investments, could hinder construction activity
moving forward.

“In addition, activity in those countries more affected by the
sovereign debt crisis may be dampened by higher financing costs and
adjustments in the financial sector, while in Germany activity will be
supported by low financing costs,” the ECB said.

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

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

FRANKFURT (MNI) – Long-term inflation expectations in the Eurozone
have remained “relatively well anchored” during the crisis, and
maintaining those expectations during such uncertain times remains of
“paramount importance”, the European Central Bank said Thursday.

But while inflation expectations have held around 2%, the ECB said
there “has been somewhat more uncertainty surrounding this level since
the onset of the crisis in 2008,” and the fiscal measures taken by
governments in response.

“Keeping longer-term inflation expectations well-anchored is of
paramount importance in such an environment,” the ECB said in a study of
long-term expectations accompanying its Monthly Bulletin.

The ECB warned that “a de-anchoring of longer-term inflation
expectations would undermine the central bank’s ability to maintain
price stability and would give rise to more widespread macroeconomic
instability.”

While the “remarkable stability” of expectations showed the ECB has
built up credibility since 1999, “the high uncertainty in recent years
indicates the need to continue monitoring these expectations closely in
the future.”

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

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

• Sharp drop in overnight deposit volume “a good sign”
• ECB cut deposit rate to push banks to lend, not dump funds
• EU countries need to tackle high budget deficits
• Must tackle deficits at satisfactory pace
• ECB must remain vigilant

Dow Jones reporting.

PARIS (MNI) – Global oil supply capacity should keep slightly ahead
of expected moderate demand growth next year, potentially averting price
shocks in the absence of major geopolitical tensions and supply outages,
the International Energy Agency said Thursday.

The agency’s first forecasts for 2013 see average global demand
growing by 1.0 million barrels per day (mb/d) to 90.9 mb/d after a
projected increase of 0.8 mb/d this year.

Demand growth next year would come entirely from emerging markets
and remain “well below the pre-credit crunch trend,” the IEA said in its
monthly Oil Market Report, noting that demand from outside the OECD bloc
should surpass that of the OECD.

Non-OPEC supply growth should accelerate to 0.7 mb/d next year to
average 53.9 mb/d, coming largely from Canadian oil sands, US light
tight oil, and Brazil’s Campos and Santos basins, it said, revising down
its growth projection for this year by 0.2 mb/d to 0.4 mb/d.

The global demand forecasts are roughly in line with those of OPEC
released Wednesday for 0.8 mb/d growth next year after +0.9 mb/d this
year. But OPEC expects stronger growth in non-OPEC supply of 0.7 mb/d
this year and 0.9 mb/d next year.

The IEA’s forecasts would leave next year’s expected “call” on OPEC
crude and/or stocks at an average of 30.5 mb/d, unchanged from this
year’s projection. Next year’s “call” would range from 29.7 mb/d in 2Q
to 30.9 mb/d in 3Q.

While the forecasts “hint at something of a price ceiling, the
latent potential of emerging market demand growth and ongoing risk of
nasty supply surprises could keep prices stubbornly high in absolute
terms,” the agency cautioned.

OPEC’s crude capacity growth is expected to slow to 245 kb/d next
year after a 750 kb/d surge this year thanks to Libya’s comeback. Gains
in Iraq, the UAE and Angola are expected to offset an assumed depletion
of Iran’s capacity if sanctions remain in force. OPEC NGL output would
average 6.5 mb/d in 2013 after growth of 0.4 mb/d this year.

Next year’s expected OPEC/stock call would be below OPEC’s crude
supply last month of 31.8 mb/d, down 0.1 mb/d from May. Angola and Iran
posted the largest declines in June, offsetting near-record production
of 10.15 mb/d from Saudi Arabia. Preliminary estimates for imports of
Iranian oil in June stand at 1.9 mb/d, around 0.5 mb/d below levels in
4Q, the IEA said.

Global oil supply fell by 0.5 mb/d in June to 90.4 mb/d, with
non-OPEC liquids production accounting for 75% of the decline. Compared
to a year ago, global production was up 2.0 mb/d, all from higher OPEC
crude and NGLs.

Non-OPEC supply fell by 0.4 mb/d in June due to labor strikes,
tropical storm Debby and planned maintenance in Gulf of Mexico and was
0.1 mb/d lower on the year.

“Physical market fundamentals have clearly eased since the start of
the year,” with an implied global stock build in 2Q of 2.1 mb/d after
+1.3 mb/d in 1Q, the IEA estimated.

OECD industry oil stocks rose by 15.4 mb in May to 2.672 billion,
lagging a five-year average build of 25.1 mb. Forward demand cover fell
by 0.8 day to 58.9 days, still 1.4 days above the five-year average.
Preliminary data for June point to a 7.2 mb decline, in contrast with a
five-year average 2.3 mb build, the IEA said.

With an underlying OPEC crude/stock call now estimated at near 31
mb/d in the second half of this year, “OPEC producers may follow through
on their mid-June pledge to curb output from current elevated levels if
customers request less oil,” the IEA said.

“While strict adherence to the previous 30 mb/d quota risks a
renewed and potentially damaging price surge, lower production may in
any case derive from the tightening restrictions on Iran’s exports,” it
warned.

- Paris newsroom +331 4271 5540: ssandelius@marketnews.com

[TOPICS: MI$$$$,MI$OI$,M$$CR$,MAUDS$]

• Sees heightened uncertainty, euro zone growth remains weak
• Retains full capacity to fulfill mandate via firm, timely action
• Overall wage pressures in euro area should remain contained
• Input, output price indices signal downward price pressures
• Sluggish recovery in advanced economies largely due to low private consumption

Dow Jones reporting.

The recent dip to 1.0136 in AUD/USD  unearthed bids from Australian exporters and has halted another attempt to rally EUR/AUD  which stalled at 1.2044.

No change in my view that unless we break sharply higher through 1.2100, a test of the recent all time lows is on the cards

AUD/USD’s around 1.0154 with EUR/AUD  around 1.2029

• ‘No debate’ about  narrowing  of the ECB’s interest rate corridor
• ECB is ready to use existing and new tools if required

Speaking to Viennese reporters

• No plan to cut 0.1% interest paid to financial institutions’ excess reserves parked with BOJ
• Japan likely to achieve 1% inflation in not too distant future
• Consumer spending in earthquake damaged areas likely to support domestic demand in future
• BOJ will not automatically link its policy to that of other central banks
• Slowdown in Europe and China is lasting longer than anticipated
• US job creation slowing but consumer spending is firm
• BOJ will ease at a pace deemed most appropriate with eye on Japan’s economy, prices
• Expect China to eventually emerge from its slump as China eases policy
• Still a lot of uncertainty about fiscal and structural reforms in Europe
• Overseas economies slowing more than expected largely due to Europe’s debt woes
• Takes a very long time for effects of easing to appear in economy, prices
• Thursday’s move aimed at ensuring BOJ can achieve current target for asset buying and lending
• It is not the case that BOJ is more optimistic on global economy than other central banks

Around 1.0150 i’m told, but we have seen a recent dip just under to  a day’s low of 1.0146.

AUD’s around 1.0151

EUR/USD down at 1.2215.  Bank of Korea notable seller in recent trade.

• Italian 10 year govt bond yield down 6 bps at 5.75%

HEY!!! that’s the wrong direction.  How am I gonna get my pop goes the weasel headline if euro zone periphery bonds continue rallying

DAX off -0.7%, Spain’s IBEX off -0.8%.

EUR/USD under a little pressure, presently down at 1.2220.

Buy orders reportedly gathered 1.2200/10 ahead of 1.2200 barrier option interest, with sell stops seen through 1.2195.

Will I get to put up a ‘pop goes the weasel’ headline this morning?  Seems like a long time since I’ve done so.

Let’s have an instant poll, will I get to put up my headline this morning, or not….

There appears to be some fairly reasonable offers in the 1.2030/40 zone now which covers yesterday’s highs and this morning’s bounce off Asian lows around 1.1935.

The move has partly unwound the oversold look on the charts and will likely open opportunities to reload shorts particularly if the 1.2200 EUR/USD barrier is threatened. Buy stops were triggered up through 1.2000 earlier which might now offer some interim support but  unless 1.2100 is breached a retest of the all time lows seen yesterday can’t be ruled out.

EUR/AUD’s sitting at 1.2028

GERMANY DATA: June WPI -1.1% m/m, +1.1% y/y; may +1.7% y/y
– Germany June WPI: solid fuels/oil products -4.1% m/m
– Germany June WPI: ore/iron/steel/non-ferrous metals -0.8% m/m
– Germany June WPI: grains/seeds/feed -2.7% m/m
– Germany June WPI: fruits/vegetables/potatoes +1.0% m/m
– Germany June WPI: data processing/communication +0.2% m/m
– Germany June WPI: food/beverages/tobacco +0.2% m/m
– Germany June WPI: household electrical items/TV/radio -0.2% m/m
– See MNI MainWire for details