FRANKFURT (MNI) – The European Central Bank said Wednesday that it
has allotted $4.4912 billion in its 84-day USD liquidity providing
operation.

The central bank said it received 11 bids.

Today’s operation was carried out at a fixed rate of 0.64%. The
Euro/USD rate was set at 1.2333.

–Frankfurt Bureau tel.: +49-69-720 142, email: frankfurt@mni-news.com

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

FRANKFURT (MNI) – The European Central Bank said Wednesday that it
has allotted $9.256 billion in its 7-day USD liquidity providing
operation.

The central bank said it received 10 bids.

Today’s operation was carried out at a fixed rate of 0.64%. The
Euro/USD rate was set at 1.2333.

–Frankfurt Bureau tel.: +49-69-720 142, email: frankfurt@mni-news.com

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

-BOE Forecasts 0.04% Growth For 2012; 1.77% for 2013

LONDON (MNI) – The Bank of England has forecast growth to bounce
back sharply in the third quarter, but expects to see virtually no
growth throughout the whole of 2012.

Figures released today showed the BOE forecasting year-on-year
growth in GDP to come in at -0.1% in Q3 before rising to 0.39% in Q4.
Calculations by MNI show that this implies a quarterly rise in GDP of 1%
in Q3 and a fall of 0.1% in Q4.

For 2012 as a whole the forecasts imply growth of just 0.04% with
output forecast to rise 1.77% in 2013.

The MPC publishes a “backcast” of growth which revealed it believes
Q2 growth was a little stronger than the -0.7% decline reported in the
official data. The implied Q2 growth rate was for a fall of 0.5% on the
quarter — which is in line with the stronger industrial production and
construction data recently released.

The Bank of England forecast consumer price inflation to fall to
1.68% two years ahead in Q3 2014. The data also showed there was a 58%
chance that inflation would be at or below 2% in two years’ time, with a
significant 32% change it could be below 1%.

Economic growth in Q2 was hit by the impact of the Jubilee and
exceptionally wet weather.

The data are contained in the numerical parameters for the August
BOE Inflation Report.

–London newsroom 0044 20 7862 7491; email: puglow@marketnews.com
drobinson@marketnews.com
[TOPICS: M$B$$$,M$$BE$]

Ooooh I say

–BOE MPC Most Members Aug Policy Decision Relatively Straightforward
–But Some Members Saw Decision ‘More Finely Balanced’
–BOE MPC: Some Saw ‘Good Case’ For More Asset Purchases In Aug
–BOE MPC: Most Wanted Take Stock FLS Over Coming Months
–…And Implications FLS Had For ‘Other Potential Policy Options’

LONDON (MNI) – The Bank of England Monetary Policy Committee voted
unanimously for unchanged asset purchases and Bank Rate at its August
meeting, but some members felt that the decision was ‘more finely
balanced’ than others and that there was a good case for more asset
purchases.

The minutes show most members of the MPC viewing the decision as
“relatively straightforward” and that these wanted to take stock of the
impact of the Funding for Lending Scheme and its impact on the economy:

“Over the coming months the Committee could take stock of the
impact of the FLS and the implications this had for other potential
policy options,” the minutes of the August meeting stated.

But the minutes continued:

“For some members the decision was nevertheless more finely
balanced since a good case could be made at this meeting for more asset
purchases”.

Those members (Spencer Dale and Ben Broadbent), who had voted
against the July decision to expand QE, this time went along with the
decision of the committee in August – seeing potential costs to
reversing that decision.

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

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

UK DATA: Jul Claimant Count Unemployment -5,900; rate 4.9%
-Jun Claimant Count Unemployment revised to +1,000 from +6,100
-June Average Weekly Earnings total pay +1.6% vs 1.5% in May
-Apr-Jun ILO Unemployment -46,000; Rate 8.0%
————————————————————————
Claimant count unemployment fell unexpectedly in July, possibly
helped by the Olympics, but overall the labour market continued to show
remarkable resilience. Claimant count unemployment fell 5,900 in Jul,
following a revised 1,000 rise in Jun, confounding expectations for a
7,000 increase. The Olympics looks to have had some impact on the data
with the claimant count in London alone falling 2,800 in July, making up
the bulk of the decline. There was, however, a significant special
factor – a change in the benefits regime – which possibly boosted the
claimant count meaning that the fall would have been even greater
without it.

• MPC voted 9-0 to keep QE at £375 bln  and interest rates at 0.5% in August as expected
• MPC discussed in August whether to  expand or continue with Gilt purchases announced in the last meeting
• Some members were ‘finely balanced’ over whether to expand Gilt purchases
• No discussion over a further bank rate cut
• MPc will assess FLS over the next few months
• Q3 growth likely to remain weak, excluding temporary boosts from ‘one-off’ factors
• growth likely to accelerate after Q3, with a boost to real income from lower inflation
• EUR/GBP fall weakens prospect for  UK’s rebalancing towards net exports

Better than Reuters’ median forecast of +6,000

Claimant count rate unchanged at 4.9%, as expected.

Ilo jobless -46,000 in 3 months through June, rate 8.0% which is better than Reuters’ median forecast of 8.1% and the lowest rate since May-July 2011.

Cable touch firmer at 1.5695.

ONS says most of the drop in UK unemployment due to fall in London.  Olympics-related innit.

How to prepare a $340m (£216.6m) fine: Take one British bank and mix liberally with $250bn of possibly illegal Iranian transactions. Add one very ambitious New York State regulator, and a pinch of nationalism. Shave off £5.8bn and set to bake for one week. Take out of oven right before courtroom hearing. Serve cold to investors.

Unfortunately it doesn’t  look like it’s all over with the Fed and US treasury yet to have their say…

Helia Ebrahimi- Telegraph

LONDON (MNI) – At present, quantitative easing is a better way of
providing stimulus for the economy than further rate cuts, a senior Bank
of England policy maker says.

On a visit to Northern Ireland, Monetary Policy Committee member
Paul Fisher told the Belfast Telegraph that although not ruling out
rate cuts, at present QE was more stimulative.

“”If we thought (rates cuts) would add more stimulus we would do it
but asset purchase through quantitative easing is a more powerful way of
aiding the economy…but we’re keeping that under review,” Fisher told
the paper.

– London Bureau (+20 7862 7499), ukeditorial@marketnews.

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

USD/JPY sits at 78.92 having been as high as 78.98 so far.

Various reports have buy stops coming thick and fast from here.

Talk of buy stops through 79.05, 79.10, 79.15 and 79.20. Gorden Bennett!!!

I guess it’s always nice to have choices

Shame they didn’t have those in the late 70′s when I was failing my driving test three times

Funny really….. ;)

LONDON (MNI) – Consumer inflation in the U.K. is likely to edge
lower over coming months, Bank of England Deputy Governor Charles Bean
said Tuesday.

Speaking to Yorkshire-based website TheBusinessDesk.com, Bean said
he was not surprised by the higher than forecast official inflation
numbers released yesterday.

“The number was not significantly higher than we were expecting.
It’s true that some of the city commentators had a rather lower
expectation but it may be they hadn’t looked sufficiently closely at
what was happening to the various components,” he said.

But Bean still saw an outlook for lower inflation ahead, adding: “I
don’t think that number is likely to change the big picture which is
that inflation is likely to continue edge down during the second half of
this year and into next year.”

Bean also accepted that growth had been weaker than the Bank of
England had expected, but said the policy of quantitative easing was
gaining traction.

–London newsroom 0044 20 7862 7495; email: ukeditorial@marketnews.com

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

So says MPC member Paul Fisher.

I spent some time in Belfast back in the 80′s.  Kind of weird seeing the British troops roaming the streets. Guess it’s much-changed these days.

LONDON ((MNI) – The Bank Of England said Wednesday it was offering
an unlimited supply of U.S. dollars in both 7-day and 84-day operations.

The settlement date on the 7-day op was August 16 maturing August 23
2012. The Bank said the repo would be at a fixed-rate, with the rate to
be set at 0.64%.

The settlement date on the 84-day op was August 2 maturing Nov 11
2012. The Bank said the repo would be at a fixed-rate, with the rate to
be set at 0.64%.

–London Bureau; Tel: +442076341655; email: ukeditorial@marketnews.com

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

We’re at August highs currently around 1.1780 and a break through 1.1800 should accelerate towards the July 24/27 highs of 1.1856, which could signal a base is now in place at 1.1600.

AUD/USD’s looking a bit heavy now as  recent negative Chinese news weighs on the pair but there are some reasonable bids sitting in the 1.0450/60 region ahead of sell stops through 1.0445.

There’s talk of  sovereign and real money demand ahead of 1.0400 despite the market looking a bit overlong, but equally offers previously up around 1.0540/50 from Swiss names and US hedge funds have apparently been lowered to just under 1.0500.

That said , with a large chunk of Europe on holiday today(Assumption day) it doesn’t bode well for volatility…

AUD’s around 1.0474

• Inflation likely to edge lower later this year
• UK growth has been weaker than expected

Later this morning at 08:30 GMT we have the latest Bank of England minutes released.  Bound to include similar stuff to the above.

Out at same time UK July jobs report.

July Jobless claims expected 6k from previous 6.1k; claimant count rate expected unchanged at 4.9%; ilo unemployment rate for 3 months to June expected unchanged at 8.1%.

Is nothing sacred!!

The benchmark 10 year treasury yield has risen to 1.7774% from the 1.7241% which greeted me.

This is helping lift USD/JPY, which is testing aforementioned sell orders clustered up at 78.90/00 (presently at 79.92)

Much more of this and I might need a change of trousers