FRANKFURT (MNI) – The European Central Bank Monday declined to
comment on a media report saying it may be planning to cap borrowing
costs for Eurozone peripheral states.

German magazine Der Spiegel reported over the weekend that the ECB
might establish pre-determined yield thresholds to decide when to
intervene in sovereign bond markets. The central bank’s Governing
Council will decide whether to implement such a strategy at its next
meeting on September 6.

Spiegel said the thresholds would serve as a signal to investors of
the yield level the ECB considers appropriate for each country. The
article also suggested the ECB would be prepared to use unlimited
resources to keep the yields of peripheral government bonds below their
targeted levels.

– Frankfurt bureau: +49 69 720 142; email: frankfurt@mni-news.com

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

LONDON (MNI) – Mortgage lending was modestly higher in July on a
year earlier, according to Council of Mortgage Lenders data.

The non-seasonally adjusted CML figures showed gross mortgage
lending rose to Stg12.7 billion in July from Stg11.744 billion in June
and Stg12.49 billion in July last year, a 1.7% rise on the year. The
July outturn was the highest since November 2011.

The underlying picture remains one of subdued mortgage lending,
although recent monthly volatility has been high as a result of one-off
effects such as the expiry of the stamp duty holiday in March and the
extended holiday for the Diamond Jubilee.

“Gross mortgage lending showed an 8% increase from last month,
continuing the see-saw pattern seen throughout this year, albeit against
a broadly flat market,” CML market and data analyst Caroline Purdey
said.

“We look forward to the September figures when the distorting
effects of the Diamond Jubilee and the Olympics should largely have
worked their way through,” she added.

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

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

We’re slowly moving up through reported offers from a semi-0fficial, amongst others, and edging up towards those earlier mentioned buy stops up through 1.0470. There are more offers lying just above 1.0500 ahead of the  1.0529 Friday high.

AUD’s currently around 1.0463

By Jack Duffy

PARIS (MNI) – Eurozone leaders will begin gearing up this week for
a crucial month that could be a turning point, for better or for worse,
in the three-year-old debt crisis.

Kicking off a flurry of shuttle-diplomacy, Greek Prime Minister
Antonis Samaras will meet on Wednesday with Eurogroup President
Jean-Claude Juncker in Athens. On Thursday, French President Francois
Hollande flies to Berlin for talks with German Chancellor Angela Merkel.
On Friday, Samaras meets with Merkel in Berlin and then heads to Paris
for talks with Hollande on Saturday.

Merkel is also expected to meet with Italian President Mario Monti
before the end of August and with Spanish Prime Minister Mariano Rajoy
during the first week of September.

The intense round of talks precedes a September crunch-period that
includes a series of events of potentially critical importance for the
future of the Eurozone.

On September 6, European Central Bank President Mario Draghi is
expected to present details of the ECB’s bond buying plan after the
bank’s monthly council meeting. In addition to hints on the size and
timing of interventions, the markets will be looking for clarification
of the ECB’s status as a senior creditor and whether the new bond buying
will be sterilized or not.

On September 11, the European Commission is scheduled to unveil its
eagerly-anticipated proposal to put the ECB at the center of a new
centralized bank supervision system for the Eurozone. Getting the new
supervisor in place is a precondition for Europe’s permanent bailout
fund, the European Stability Mechanism, to recapitalize banks directly,
which would avoid saddling sovereign governments with additional debt.

Among many questions surrounding the proposal is whether the ECB
will supervise all Eurozone banks or just the 25 largest ones.

On September 12, Germany’s Constitutional Court will deliver its
ruling on whether the ESM and the EU’s new Fiscal Compact treaty are
acceptable under German law. Although the court is not expected to block
the ESM, it could demand that German lawmakers be given greater
political oversight of the fund.

The same day, voters in the Netherlands go to the polls in an
election that could see the austerity-wary Socialist Party emerge on
top. The Dutch Socialist leader Emile Roemer has criticized what he has
called the “accountants’ obsession” with keeping budget deficits below
3% of GDP and said he would seek a referendum on the Fiscal Compact
treaty.

Eurozone finance ministers and central bankers will meet in
Nicosia, Cyprus on September 14, where the top subjects will likely be
Greece and Spain.

Draghi has said the ECB will only come to the aid of a country that
formally seeks help from Europe’s bailout funds and signs a memorandum
of understanding agreeing to specific conditions. Spain’s prime minister
Rajoy has left the door open to making such a request but has said he
wants to see the details of Draghi’s plan first.

Spain is set to raise about E50 billion between now and the end of
the year, and according to reports circulating in financial markets last
week, one think tank estimates that Europe’s bailout funds could buy up
to half that amount if Rajoy requests the aid.

Greece is also facing a showdown in September as inspectors from
the Troika – the Commission, the ECB and the International Monetary Fund
- return to complete their report on whether Athens is in compliance
with its second bailout agreement. A positive report is essential for
the Eurogroup to unblock the next E31.5 billion aid tranche. If the
troika report is not ready by September 14, Eurogroup ministers will
have to take it up at their subsequent meeting in Luxembourg on October
8.

Possible efforts by Greece to stretch out its austerity program by
two years will meet with firm resistance from its northern neighbors.
Austria’s Foreign Minister Michael Spindelegger said in an interview
Friday that the Eurozone should create a mechanism to legally eject
members that do not meet deficit and other criteria.

“September will be a month with many risk factors,” says Nicolas
Veron, a senior fellow at the Brussels think tank Bruegel, which is now
chaired by former ECB President Jean-Claude Trichet. “I have a
particular concern about Greece, which remains a burning issue, but
there are many things that could go wrong,” Veron said.

–Paris newsroom, +33142715540; jduffy@marketnews.com

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

Getting reports that a semi-official has been seen on the offer in the AUD/USD just now on the Reuters matching system towards 1.0460 and also  of buy stops now in place on a break up through 1.0470 should we get up there.

AUD’s just off the day’s high of 1.0462, around 1.0456

Finns being Finns…..

‘El Pais’ are apparently reporting that an unnamed government source has said that further hikes in income tax and cuts in expenditure on pensions could be in the pipeline as a measure to avoid Spain asking for a bailout  as the country struggles to meet its budget deficit target.

The  government needs to reduce its deficit to 6.3% of GDP by the end of 2012 and despite recent VAT and personal income tax  hikes, tax revenues have still fallen.

At least that what the doers of ‘God’s work’ are saying… here’s why… (Business Insider)

JAPAN DATA: Revised monthly data from the Japan Machine Tool Builders’
Association:
–July machine tool orders revised up to Y105.7 billion, down 6.7% y/y,
marking the third straight monthly fall after -15.5% in June and -3.0%
in May.
–Orders from the domestic market, a leading indicator of core machinery
orders, -9.3% y/y, and those from overseas, which account for about 70%
of overall orders, -5.5% y/y.
–Orders from Asia +4.4% y/y, China +5.8%, EU -37.8%, U.S. -5.6%

Spanish 10 year govt bond yield off 6 bps at 6.38%

Italian 10 year govt bond yield off 7 bps at 5.71%.

Will be lending EUR/USD some support. Presently up at 1.2358.

Just for once can we please get a decent move!!!!! Would make a nice change, especially for a bloody Monday

Sell orders clustered 1.2380/00, buy stops above.

Could we be about to see  a break out higher?..

A latest Bloomberg poll  shows 14 out of 26 analysts  expect a move higher this week with just 6 forecasting a fall or neutral bias.

Billionaire investor George Soros and John Paulson have also both increased their stakes in  the SPDR gold trust

More .. Uk’s Telegraph

We’re up about 15 pips since I sat down, presently at 1.2345.

Some attention is being paid to the weekend Der Spiegel story, that ECB is mulling interest rate threshold for bond buys.

That said, we’re ensconsed in well-trodden range, whose loose parameters are 1.2250-1.2380.

Unless we break below 1.2240 or above 1.2400 I’m afraid I just can’t get excited Stops reported through both levels.

EUR/USD:  Bids, 1.2320/30 and 1.2290/00, sell stops just below through 1.2285 ahead of larger bids down at 1.2240/60, (1.2242 strong Fibonacci supp), sell stops through 1.2240. Offers start 1.2380/00 (55 day MA 1.2392) buy stops above and again through 1.2450

GBP/USD:   Bids 1.5675/85 and  1.5635/40 weak sell stops through 1.5635.  Offers 1.5700/10 and 1.5740/5o, (tech res 100 day MA 1.5748).  Strong offers above ahead of 1.5800 (barrier).

EUR/GBP: Offers 0.7865/70 and 0.7880/85.  Bids 0.7835/40 and 0.7810/15, likely sell stops below.

USD/JPY:  Offers 79.60/70 (exporters, also tech res 79.63 -100 day MA) more offers 79.80/00 and large buy stops above. Bids 79.40/50, sell stops down through 79.20 (200 day MA 79.22) ahead of bids 79.00/10 (55 day MA 79.08) and 78.75/85 with sell stops through 78.75

EUR/JPY: Sell stops on a break of bids at 97. 70/80 ahead of  more bids 98.50/60 and 97.00/10, sell stops below. Large offers 98.40/50 and 98.90/00 possible buy stops above

AUD/JPY: Strong bids 82.70/80 stronger at 82.50/60 sell stops below and again through 82.20. Offers 83.40/50, buy stops just above ahead of more offers 83.90/00

EUR/CHF: Bids 1.2000/10(SNB), Offers 1.2025/30 buy stops up through 1.2040

AUD/USD:  Bids 1.0400/10, and good tech support 1.0380/90. Offers 1.0445/55 and stronger offers start from 1.0500/10 and 1.0530/50

EUR/AUD:  Offers 1.1840/50 buy stops up through 1.1856 (Jul 27 highs). Bids 1.1790/00, 1.1740/50 and 1.1690/00

NZD/USD:  Strong offers 0.8130/40 buy stops above. Some tech support 0.8080/85 ahead of bids 0.8040/50, sell stops below through 0.8035 and psychological 0.8000 level

Ummmm, colour me a  tad sceptical on that one.

‘This debt crisis is following the same path as one 30 years ago. Time to rethink how economics is taught to avoid another lost decade. ‘

For the 1000NY/1400GMT cut

EUR/USD: 1.2250. 1.2400, 1.2450

USD/JPY: 79.00, 79.15, 79.25

EUR/JPY: 98.00

AUD/USD: 1.0300, 1.0350, 1.0570, 1.0600

AUD/JPY: 81.00

NZD/USD: 0.8100, 0.8150

Greece has to stick to conditions of its aid programme insists Germany’s parliamentary leader Volker Kauder ahead of this weeks eurozone talks .   UK’s  Guardian

Good old Andrew

Only in Australia….!

He expects Greece to step up its efforts to meet reform targets and does not expect a Grexit unless the country violates all requirements and fails to stick to any agreement….

“In case of such total refusal by Greece with regards to budget consolidation and structural reform, one would have to look into the question.” he said

More.. UK Independent