10 year Spanish/German govt bond yield spread narrows to 532 bps, off 7 bps on day.

10 year Italian/German govt bond yield spread narrows to 445 bps, off 12 bps on day.

Hope springs a turtle…..

Worse than Reuters forecast of -0.4% m/m and +1.9% y/y.

May producer prices confirmed at  -0.5% m/m, +2.3% y/y

LONDON (MNI) – The UK construction sector surprisingly expanded at
the start of the third quarter after a very weak second quarter,
according to Markit/CIPS.

The data, the second of CIPS’ July trilogy, showed the July
construction PMI rose to 50.9 from 48.2 in June, although new orders
posted their second largest fall since January 2010, raising doubts over
the sustainability of the recovery.

“Survey respondents widely cited a lack of new opportunities to
tender and a general weakness in underlying market demand,” the
CIPS/Markit report said.

The July manufacturing PMI plunged to 45.4 from 48.4 in June,
dropping deep into contractionary territory below the 50 breakeven
level, but construction rebounded. The data are likely to have been more
volatile due to the extra national holiday in June for the Jubilee,
making for a choppy monthly pattern.

“July’s survey offered little sign of an imminent rebound in the UK
construction sector, with total activity rising only marginally after
well documented temporary factors had weighed on output last month,” Tim
Moore, Senior Economist at Markit, said.

This week’s CIPS data are coming in too late for the Bank of
England Monetary Policy Committee, which announces its decision at 1100
GMT today and with the CIPS service sector data due out Friday

Normally the MPC gets an advance view of the purchasing managers
data but a Markit spokesperson stated that “the Bank of England did not
get our numbers in advance this month.”

-London newsroom: +44 207 862 7491; email:drobinson@marketnews.com

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

FRANKFURT (MNI) – German new car registrations fell back sharply in
July, after a one-time rise in June, the carmaker association VDIK
reported on Thursday, suggesting that the Eurozone crisis may already be
weighing on consumer spending.

Some 248,000 new passenger cars were registered in July, down 16.2%
from June and almost 5% lower than one year ago.

Between January and July, 1.88 million cars were registered,
broadly unchanged from the same period in 2011. This contrasts with the
declining trend in other Eurozone markets.

VDIK head Volker Lange warned that the ongoing debt crisis could
hinder further growth in the car market.

“The passenger car market in the fall can only be livelier and more
stable if the financial crisis in Europe is closer to a solution and the
confidence of citizens in politics and the economy is strengthened,”
Lange said.

Rising employment continued to support consumer spending propensity
last month, offsetting a decline in income expectations, a GfK poll
noted.

“The current financial crisis is also impacting willingness to
buy,” GfK said. “The lack of trust in financial markets and historically
low interest rates mean that saving money does not appeal. Consequently,
consumers are more likely to make high-value purchases.”

Mirroring GfK’s findings, a European Commission survey showed
consumers’ propensity to make major purchases at present rebounded in
July to a four-month high.

However, with inflation and jobless fears rising, households said
they were somewhat less likely to make big buys over the next year than
in June, the survey showed. Intentions to buy a car in the coming year
have been recovering from very low levels, but at a slow, uneven pace.

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

[TOPICS: M$X$$$,M$XDS$,MAGDS$,M$G$$$]

Spanish auction went ok. Well at least they raised their target amount. Had to pay up ofcourse.

EUR/USD has extended rally to 1.2280.

Sell orders clustered 1.2290 thru 1.2310.

Exceeded targeted amount of Eur 3 bln, but with higher yields

Sold Eur 1.06 bln of  2014 bonds yield 4.774% from 3.592%, sold Eur 1.024 bln of 2016 bonds  yield 5.971% from 5.536%,  and sold Eur 1.046 bln of 2022 bonds yield 6.647% from 6.430%.

Up nicely from 48.2 in June and demonstrably stronger than Reuters’ median forecast of 48.0.

Cable up about 12 pips at 1.5542.

Big deal. That kind of day unfortunately.

What a nice man.

If you want to enter our latest non-farm payrolls competition ya betta get ya arse in gear. Here’s the link.

The market’s looking at an improvement  to around 48.7 from 48.2 in June, and GBP/USD’s been in a 1.5527-58 range since i crawled out of bed.  Reuters is apparently looking at a reading of 48.0 .

All will be revealed in 10 mins

(Bids sit down at the 1.5500/10 area  and there some congestion on the charts down in the 1.5460/70 level below, topside offers are touted up around 1.5605/15).

Amazing what ya can find trawling through twitter.

I saw this yesterday and it did tickle me….

Apparently it’s Swiss names buying this morning that’s led a move up to 1.20299 on the EBS.  The rally’s so far stalled just ahead of buy stops reported at 1.2035.

Another ‘exciting ’ observation in this pairing  is the option expiry at 1.2025 which is reputedly for around Eur 200 mio…

The cross currently trades around 1.2025

Above analysts forecasts of 47.0 and showing an unexpected improvement following slump in recent months, with the highest reading since March

Italian 2 year note yield off 12 bps at 3.65%.

EUR/USD surges 10 pips, presently at 1.2260!!!

Reminds me of one of my old football chants “WHAT A LOAD OF BOLLOX!!”

Those were the days, standing on the North Bank in the freezing cold, cup of stewed tea in hand…..

Here’s the ECB  link to the press conference.

Personally I plan to be off tromping round the country roads of South Suffolk when he’s doing his jawboning…. (I know, I’m just such a consumate professional)

Press conference due 12:30 GMT.

Well above the 2% expected by analysts, but below May’s reading of 6.2%

EUR/CHF’s still comatose around 1.2018

By 27,814 people. Total 4.6 mln.

Oh no Joe, say it ain’t so!!

EUR/USD sits at 1.2250, ABSOLUTELY unchanged from when I sat down close to three hours ago.  Bummer

What ya’ll waiting for!!!!!!!!!

BERLIN (MNI) – European Central Bank President Mario Draghi is to
present today a two-pronged strategy to contain the Eurozone debt
crisis, the German daily Sueddeutsche Zeitung (SZ) reported Thursday.

According to SZ, Draghi is planning a concerted action by the ECB
and Europe’s future permanent bailout fund, the European Stability
Mechanism, to bring down high bond yields of Italy and Spain.

Under this plan, the ESM would buy Spanish and Italian bonds on
the primary market while the ECB would purchase larger amounts of bonds
on the secondary market, the paper wrote.

German weekly Der Spiegel had already reported a similar plan last
Sunday.

SZ wrote today that a majority is emerging in the ECB Governing
Council in favour of resuming the central bank’s bond purchasing program
and coordinating it with Eurozone governments. A final decision,
however, could only be taken after the German Constitutional Court has
delivered its preliminary ruling on the ESM on Sept. 12, SZ said.

The role of the ECB would be to push the interest rates down to an
acceptable level before bond auctions and to keep them fixed at a lower
level over the long-term, SZ said.

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

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