• ECB is not a political institution
• Fulfilling our mandate sometimes requires us to go beyond standard monetary policy tools
• This may at times require exceptional measures

Comments in Die Zeit

Reuters reporting.

From 86.5 in July, in line with Reuter’s median forecast.

Reuters headl;ine.

For the 1000NY/1400GMT cut

EUR/USD: 1.2450, 1.2490, 1.2500, 1.2505, 1.2515, 1.2525, 1.2625

USD/JPY: 78.15, 78.50, 79.10, 79.15

GBP/USD: 1.5650, 1.5730, 1.5750,

EUR/GBP 0.7900, 0.7975

AUD/USD: 1.0320, 1.0400, 1.0425, 1.0460,

AUD/JPY: 82.50

USD/CAD: 0.9925

• If needed we will take very decisive action in the fx market
• Better if we can keep yen exchange rate movement more stable
• Interested to see ECB bond plan (me too)

On the back of the the NZD/USD sell-off with real money being touted behind the move to fresh day’s highs of 1.2916.

The rally is now meeting some headwinds from proprietary names amongst others looking to reinstate some shorts above 1.2900.

AUD/NZD is currently just off the day’s highs at 1.2914

–Hesse Above, Other States Match Pan-German Forecast

Hesse CPI

August: +0.4% m/m, +2.3% y/y
July: +0.4% m/m, +1.7% y/y

—
Baden-Wuerttemberg CPI

August: +0.2% m/m, +1.8% y/y
July: +0.4% m/m, +1.4% y/y
—
Brandenburg CPI

August: +0.2% m/m, +2.0% y/y
July: +0.4% m/m, +1.7% y/y
—
Pan-German CPI

MNI median forecast: +0.2% m/m, +1.9% y/y
MNI forecast range: -0.1% to +0.3% m/m

July: +0.4% m/m, +1.9% y/y
—

FRANKFURT (MNI) – Consumer prices rose 0.4% in August in Hesse,
but only 0.2% in the German states of Baden-Wuerttemberg and
Brandenburg, the states’ statistics offices said Wednesday.

The monthly gain lifted annual inflation to 2.3% from 1.7% in
Hesse, to 1.8% from 1.4% in the western German state of
Baden-Wuerttemberg, and to 2.0% from 1.7% in eastern Germany’s
Brandenburg.

The results could put some upward pressure on the median forecast
of a 0.2% monthly reading for pan-German CPI in an MNI survey of
analysts. Saxony earlier Wednesday posted a 0.3% monthly increase, and
North-Rhine Westphalia +0.4%.

Energy prices drove monthly inflation pressures in all three
states, with food prices — especially seasonal foods — applying
downward pressure on the month, continuing the trend already seen in
previous releases of state data for the month.

For Hesse, heating oil was up 5.7% on the month and 15.7% on the
year, with motor fuels up 4.9% in August and 11.1% on the year.
Ex-energy, core inflation was up only 0.1% in August and 1.5% on the
year.

Brandenburg saw a 3.5% monthly increase in heating oil and 15.7% on
the year, while motor fuels rose 3.8% on the month and 7.5% from the
previous year. This puts core inflation ex-energy at -0.1% on the month
and at +1.6% on the year.

For Baden-Wuerttemberg, heating oil rose 4.1% on the month and is
up 12.4% on the year. Motor fuels rose 3.6% in August and 9.5% on the
year.

North Rhine-Westphalia and Saxony already put some upside pressure
on the pan-Germany forecast with their results earlier, with both seeing
upward pressure on the month from energy prices.

Consumer prices in Saxony rose 0.3% in August, lifting the annual
inflation rate to 2.1% from +1.8%. North Rhine-Westphalia reported that
consumer prices rose 0.4% on the month and were up 1.9% on the year.

Energy prices were cited as a key risk to the economic outlook by
the Bundesbank in its August monthly report, though President Jens
Weidmann in a weekend interview with Der Spiegel reiterated that he saw
no “immediate inflation dangers.”

While the central bank said risks to the outlook have “increased
notably” for the second half of 2012, also due to the Eurozone crisis,
it suggested the ongoing weakening of energy price pressures should
continue to encourage strong consumer spending in the second half of the
year.

German import prices rebounded 0.7% in July after three straight
monthly declines, though prices continued to fall when excluding energy
prices. The annual rate of inflation fell to +1.2%, the slowest pace
since December 2009.

Oil prices rose 7.9% in July, while Brent crude prices have
continued to pick up the pace in August, rising to a peak of more than
$116 last week before falling back to below 112$ this week.

Producer prices meanwhile were unchanged month-over-month in July,
dampening the annual rise to a 26-month low of 0.9%.

ECB Executive Board member Joerg Asmussen said Monday he continued
to expect weak economic growth and moderate inflation in the Eurozone,
with consumer prices likely falling below 2% in 2013.

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

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

ITALY DATA: June sa nominal retail sales +0.4% m/m, -0.5% y/y
–Apr-June 3-month/3 month moving average -1.7% vs. Jan-Mar
–June sa food sales +0.2% m/m, +1.3% y/y
–June sa non-food sales +0.4% m/m, -1.4% y/y
–Italy’s June NIC consumer price index +0.2 m/m, +3.3% y/y

GERMANY DATA: Hesse Aug CPI +0.4% m/m, +2.3% y/y; Jul +1.7% y/y
–Brandenburg Aug CPI +0.2% m/m, +2.0% y/y; Jul +1.7% y/y
–Baden-Wuerttemberg Aug CPI +0.2% m/m,+1.8% y/y; Jul +1.4% y/y
–Hesse Above, Baden-Wuerttemberg/Brandenburg match MNI median f’cast
–See MNI Mainwire for details

Talk is China and funds were behind the recent dip from around 0.8045 to day’s lows of 0.8018.

There are some sizeable bids in the 0.8000/10 area to fill with talk also of a barrier at 0.8000.  Large sell stops are positioned on a break of the level.

NZD/USD’s currently around 0.8025

Should keep the kiwi pointing lower especially after the recent Fonterra payout cuts which is expected to lower NZ’s GDP by around NZ$ 0.5 bln.

• Hurt by euro debt crisis
• German services sentiment remains ‘positive’
• German services sales may grow 2.0% in 2012, may grow 2.25% in 2013

Nicholas Sambanis in The New York Times.

Saxony CPI

August: +0.3% m/m, +2.1% y/y
July: +0.4% m/m, +1.8% y/y

—
Pan-German CPI

MNI median forecast: +0.2% m/m, +1.9% y/y
MNI forecast range: -0.1% to +0.3% m/m

July: +0.4% m/m, +1.9% y/y

—

BERLIN (MNI) – Consumer prices in the eastern German state of
Saxony rose 0.3% in August, lifting the annual inflation rate to 2.1%
from +1.8%, the state statistics office said Wednesday.

The monthly result is above the median forecast of a +0.2% reading
for pan-German CPI in a MNI survey of analysts.

Upward pressure on monthly inflation came largely from energy, with
some downward pressure from seasonal foods. Excluding heating oil and
motor fuel, consumer prices rose 0.1% on the month and were +1.7% on the
year.

Heating oil was up 5.2% on the month and 15.7% on the year, motor
fuels rose 4.9% from July and 8.9% on the year.

Food prices fell 0.3% on the month, with seasonal foods down
2.6%. Food costs are still up 3.2% on the year, with seasonal foods up
7.5%.

Inflation ex-seasonal foods was up 0.4% from July and 2.1% on the
year. Core inflation excluding both energy and seasonal foods was up
0.1% on the month and 1.5% on the year.

North Rhine-Westphalia already put some upside pressure on the
pan-Germany forecast with its results on Tuesday, reporting that
consumer prices rose 0.4% on the month and were up 1.9% on the year,
also thanks to energy price gains. Excluding heating oils and fuels,
prices in the state rose 0.2% on the month and 1.7% on the year.

Energy prices were cited as a key risk to the economic outlook by
the Bundesbank in its August monthly report, though President Jens
Weidmann in a weekend interview with Der Spiegel reiterated that he saw
no “immediate inflation dangers.”

While the central bank said risks to the outlook have “increased
notably” for the second half of 2012, also due to the Eurozone crisis,
it suggested the ongoing weakening of energy price pressures should
continue to encourage strong consumer spending in the second half of the
year.

German import prices rebounded 0.7% in July after three straight
monthly declines, though prices continued to fall when excluding energy
prices. The annual rate of inflation fell to +1.2%, the slowest pace
since December 2009.

Oil prices rose 7.9% in July, while Brent crude prices have
continued to pick up the pace in August, rising to a peak of more than
$116 last week before falling back to below 112$ this week.

Producer prices meanwhile were unchanged month-over-month in July,
dampening the annual rise to a 26-month low of 0.9%.

ECB Executive Board member Joerg Asmussen said Monday he continued
to expect weak economic growth and moderate inflation in the Eurozone,
with consumer prices likely falling below 2% in 2013.

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

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

GERMANY DATA: Saxony Aug CPI +0.3% m/m, +2.1% y/y; Jul +1.8% y/y
–Aug CPI ex-seasonal foods +0.4% m/m, +2.1% y/y
–Aug CPI ex-fuel/heating oil +0.1 m/m, +1.7% y/y
–Aug CPI ex-energy/seasonal foods +0.1 m/m, +1.5% y/y
–Aug motor fuel prices +4.9% m/m; heating oil +5.2%
–Aug package vacations -0.7% m/m; other svcs +0.1%
–Aug alcohol/tobacco +0.1% m/m; healthcare +0.1%
–Aug food prices -0.3% m/m; seasonal foods -2.6%
–Aug clothing/shoes +0.7% m/m; education unch
–See MNI Mainwire For Details

Demonstrably weaker than Reuter’s median forecasts of -0.2%, -0.2% respectively. Ughhhh 

Q1 GDP data revised down to +0.3% from prelim +0.4%.

Above forecasts of 1.50 and last month’s reading of 1.41 (adjusted down from 1.43)

Seventh consecutive monthly increase and showing a likely pick up in the overall swiss economy.

FRANCE DATA: August mfg sentiment 90 vs July 89 (90)
–Above expected; MNI analysts survey median forecast 89
–Execs’ own-company outlook -6 vs July -9 (-8)
–Sector production outlook -44 vs June -44 (-45)

From revised 89 in July (prev 90)

Whatever….

EUR/USD pretty much unchanged over past couple of hours, presently at 1.2558.

Buy orders 1.2540/50, light sell stops below there.

Sell orders 1.2580/00 ahead of 1.2600 barrier option interest.  Buy stops above there.

Ho hum……

EUR/USD: Bids 1.2540/50, weak sell stops below ahead of more bids 1.2520/30 and larger bids (Russian, M/E) at 1.2490/1.2510. Sell stops through 1.2480. Offers/tech res 1.2580/00 (100 day MA 1.2596, barrier at 1.2600) likely buy stops just above

GBP/USD:  Offers 1.5830/50 (UK clearers) and 1.5860/70. Bids 1.5800/10 sell stops through 1.5780, more bids 1.5740/50 (100 day MA 1.5744) sell stops below, ahead of tech supp 1.5720 (200 day MA) and reported M/E bids down at 1.5700/10. More sell stops below through 1.5700.

EUR/GBP:  Offers 0.7955/55 buy stops through 0.7960. Bids 0.7905/10 and 0.7880/85

USD/JPY: Bids 78.40/50, sell stops through 78.40. Strong bids 78.00/10 (importers,Japanlife Ins co's) with large sell stops through 77.95. Offers/tech res 78.80/00 (exporters, real money and US funds 78.99- 55 day MA), buy stops just above ahead of tech res 79.14 (ichimoku cloud base).

EUR/JPY: Bids 98.50/60, 97.90/00 (55 day MA 97.90). Sell stops down through 97.75. More bids 97.10/20 ahead of tech supp 96.90/00 (96.94 cloud base). Tech res 98.75 (cloud top) ahead of offers 98.90/00 and 99.15/20. Likely buy stops through 99.20.

AUD/JPY:  Bids 81.20/30, tech supp 81.03 (100 day MA), likely sell stops below and through 81.00 ahead of tech supp 80.50/55 (Jul 6 lows). Offers 81.50/60 and 81.90/00

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

AUD/USD:  Bids 1.0345/55, sell stops through 1.0340 ahead of large bids  down at 1.0300/10 (1.0300 barrier, 1.0308- 200 day MA). Offers from 1.0375 (options, real money, funds, CTA's) up to  touted barriers at 1.0400 and 1.0450.

EUR/AUD:  Offers 1.2120/50, buy stops through 1.2150. Bids 1.2080/00 with sell stops through 1.2080.

NZD/USD: Bids 0.8030/40 ahead of larger bids 0.8000/10, large sell stops just below. Offers 0.8085/90 and 0.8115/20