Honestly, anybody would think he’s not very popular….. 

Total target amount for this mornings’ 12 and 18 month auctions was for between 3.5 bln and 4.5 bln, and they got the higher end amount.

Sold 3.53 bln of 12 month bills. Bid to cover ratio 1.9 vs 2.2 at previous auction

Sold 0.98 bln of 18 month bills. Bid to cover ratio 4.0 vs 3.7 at previous auction.

12 month average yield 3.070% vs 3.918% at previous auction.

18 month average yield 3.335% vs 4.242% at previous auction.

-July PSNB-X Stg0.557bn vs -Stg2.837bn in July 2011

LONDON (MNI) – The public finances showed a surprise deficit in
July, as spending growth rose significantly during the month, figures
from National Statistics showed Tuesday.

The data, while affected by a special factor which has reduced
corporation tax, are disappointing and show the finances further off
track to meet the Chancellor’s Budget forecasts.

Public Sector Net Borrowing excluding financial sector
interventions stood at Stg0.557 billion in July, compared with a surplus
of Stg2.837 billion in the same month a year earlier. July is usually a
surplus month due to the timing of income and corporation tax receipts
and analysts had expected to see a surplus of Stg1.9 billion.

Receipts growth on an accrued basis was down 0.8% in July compared
with a year earlier. Corporation tax receipts were down 19.3% on the
year, part of which was due to a fall in corporation tax from the oil
sector, mainly due to the closure of the Elgin oil field due to a leak.
This had cut corporation tax receipts by around Stg1 billion.

For the financial year to date, receipts growth was up 1.1%
compared with a year earlier. Even stripping out the oil impact receipts
would still have been significantly below the full year Budget forecast
for growth of 3.9%.

Spending growth was also a major factor behind the deterioration
this month, with growth of 5.1% in July on the year, mainly due to
increased departmental spending. For the year to date spending was up
3.5%, but this was still above the full year forecast of 3%.

The government’s current budget surplus fell in July to Stg1.184
billion from Stg4.202 billion in July 2011.

Excluding financial interventions, net government debt fell
slightly on the month, dropping from Stg1.039 trillion to Stg1.032.4
trillion. Net debt as a percentage of GDP also dropped a little, falling
to 65.7% from 66.2% in June.

–London bureau: 0044 20 7862 7491; email: puglow@marketnews.com

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

UK DATA: July PSNB-X Stg0.557bn vs -Stg2.837bn in July 2011
————————————————————————
The public finances showed a surprise deficit in July, as spending
growth rose significantly during the month. The data, while affected by
a special factor which has reduced corporation tax, are disappointing
and show the finances further off track. Receipts growth on an accrued
basis was down 0.8% in July compared with a year earlier. Corporation
tax receipts were down 19.3% on the year, part of which was due to a
fall in corporation tax from the oil sector, mainly due to the closure
of the Elgin oil field. This cut corporation tax receipts by around Stg1
billion. For the financial year to date, receipts growth was up 1.1%.
Even stripping out the oil impact receipts would still have been
significantly below the Budget forecast of 3.9%. Spending growth was up
5.1% in July on the year. For the year to date spending was up 3.5%, but
this was still above the full year forecast of 3%.

UK July PSNCR -£22.858 bln from -£22.994 bln in July 2011

Reports of barrier option interest lined up at 1.2450 in EUR/USD.

Guess that’s what the aforementioned 1.2430/50 sell orders are about (protection of said barrier interest)

Barrier option interest also reported at 1.5800 in cable and 1.0550 in AUD/USD.

• Greek loan interest and maturity could be adjusted
• Concessions must be within existing program and would likely pass in Bundestag

We’ve still got a EUR/USD 1.2250-1.2450 poll running.

But what’ll we see first from here, 1.2350 or 1.2450

We’re at 1.2410, so bulls got slight advantage….

Reason/s for choice always welcome, but not obligatory.

• Finland took part in all measures to end crisis, will work to improve stability
• Euro remains useful for Finland and will continue to do so in the future

Bloomberg reporting

Comments from Fitch’s Riley have helped extend the EUR/USD rally.

Stops through 1.2400 have finally been tripped and we’ve been as high as 1.2414 so far.

Sell orders seen clustered 1.2430/50, more buy stops through there.

To be honest there’s nothing earth-shattering in the Riley comments.  But it’s a good enough excuse for some price action, which to be honest is loooooong overdue.

• There will be a resolution on Europe
• Europe will stay together
• Downward pressure will persist without a resolution
• Recesssions are hurting support for austerity
• Rating cuts  will be seen in periphery EU states in no progress by year end
• Italy facing political, not economic or fiscal risk
• Italy doesn’t need more austerity

Bloomberg/DJ headlines

EUR’s getting a boost again on this , just off day’s highs of 1.2415

For those stops to get tripped through 1.2380. We’ve moved quickly to new session high at 1.2396.

ACB’s really do suck

UPDATE:  At writing buy stops through 1.2400 going off, presently at 1.2405.

You still out there Tibor

I think Charles is a glass half empty kinda guy

Being told they’ve been steadily selling into this latest push up to 1.0507, but the larger offers remain up in the 1.0530/50 area which may also contain some buy stops on a  break up of the 1.0530 level

EUR/AUD’s slipping back again towards yesterday’s 1.1776 lows which is also helping to keep the bid tone on AUD/USD

AUD/USD’s around 1.0503 with the cross around 1.1778

Just as we were getting up a head of steam, up they pop and sell

Well at least one did.  Bummer.

We’re back down at 1.2368.

Interesting little development. Just been told some light buy stops gathering through 1.2380!!

• Need to restore trust among EU members
• Joining the EU was ‘right and irreversible’ choice for Finland

Ya gotta love them Finns!!!

As a result I’m sitting here at my desk, shoes and socks off rolling a golf ball under my right  foot.

Feels rather good I have to say.

I heartily recommend it, even if you’re not suffering with plantar fasciitis

But a slow grind at that.

 RBA lack of intevention talk  has kept the tone firm, but there’s a lot of offers to wade through ahead of 1.0500, particularly towards 1.0550 , which may hold a barrier.

Some talk in the street of demand from sovereign names this morning, but as yet i can’t confirm.  Hearing bids  are similarly thick below starting from 1.0450 down to 1.0420 with sell stops through 1.0420.

Doesn’t bode well for much of range, but you never know…..

AUD’s around 1.0493 after a recent 1.0497 day’s high

Around 1.2377 session high. Boo hiss!!

BUGGER OFF!!!!!!!

We’ve got a range breakout to engineer here matey…..

Not much lower though, presently at 1.2372.

FRANKFURT (MNI) – The Bundesbank is particularly opposed to
introducing yield caps for Eurozone peripheral states as part of any new
European Central Bank bond buy program, German daily Frankfurter
Allgemeine Zeitung reported Tuesday, citing a Bundesbank source.

There is no justification for cementing a particular yield spread,
the Bundesbank source told the paper.

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 ECB called the report
“misleading,” noting that no final decision had been made.

The Bundesbank is also pushing to limit the scope of the new bond
buy program, but does not appear to be able to secure a majority for its
view, the paper said.

On Monday, the German central bank reiterated its objections to
fresh debt market interventions.

“The Bundesbank maintains its view that government bond buys in
particular should be assessed critically and that they come with
significant risks for stability policies,” it said in its Monthly
Report.

–Frankfurt bureau; +49-69-720142; jtreeck@mni-news.com

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