Very marginally stronger than Reuters’ median forecasts of flat, -1.4% respectively.

More interestingly (everything is relative ya know) May data has been revised up.  To +0.8% m/m, -0.8% y/y  from previous +0.6%, -1.7% respectively.

EUR/USD up challenging aforementioned 1.2215/25 sell orders again.

-UK July CIPS Services PMI 51.0 Versus 51.3 In June – Markit/Reuters
-UK July CIPS Composite PMI 49.5 Versus 51.1 In June

LONDON (MNI) – UK services sector growth softened a little in July
and weighted activity for construction, manufacturing and services as a
whole contracted last month.

Markit’s July headline CIPS services PMI, published by Reuters,
dropped to 51.0 from 51.3 in June. The composite PMI shrunk to 49.5 from
51.1 in June, posting its lowest reading since April 2009 and suggesting
a large chunk of the economy was contracting at the start of the third
quarter.

Analysts’ median forecast for the July services PMI was for a 51.5
outturn. The 51.0 outturn was the weakest since the snowfall-disrupted
outturn in December 2010, Markit said.

The trilogy of CIPS July surveys have been erratic, with some
distortions due to the impact of the Jubilee national holiday in June,
which depressed activity in that month and may have fueled volatility in
the subsequent month, and some due to the exceptionally wet weather.

The July construction PMI rebounded into positive territory, coming
in at 50.9, up from 48.2 in June. The July manufacturing PMI, however,
plunged to 45.4 from 48.4 in June.

“The Markit/CIPS PMI surveys for July collectively signalled the
weakest economic performance since April 2009, a downturn which can only
in part be attributed to temporary factors,” Chris Williamson, Chief
Economist at Markit, said.

The wet weather “affected the construction industry and related
activities, as well as demand for seasonal goods and services. Companies
also reported a knock-on effect of the additional bank holiday for the
Queen’s Jubilee in June, which affected orders and work flows in early
July,” Williamson said.

Despite the temporary factors, Williamson said there were clear
signs of underlying growth slowing.

The Bank of England was, unusually, not handed the CIPS data this
week ahead of the MPC’s monthly policy meeting, a Markit spokesperson
confirmed.

-London newsroom 0044 207 862 7491; email: drobinson@marketnews.com

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

I feel the need to live vicariously through our readers

Although I am going to go to a music festival….

Presently at 7.25% compared to my last report of 7.345%.

Italy 10 year govt bond yield off 12 bps on day at 6.22%.

In the shorter-end

Italy 2 year govt bond yield off hefty 43 bps at 3.36%.   Spain 2 year govt bond yield off 5 bps at 4.48%.

And below Reuters forecast of 51.5. lowest reading since  Dec 2010

July composite falls to 49.5 from 51.1 in June, lowest since April 2009

July Business expectations rose to 65.6 from 64.3 in June

No cheer here as underlying demand remains weak

–Adds Comments By Deputy Fin Min Kampeter To Story Sent 05:43 GMT

BERLIN (MNI) – Germany’s Free Democrats, the junior partner in
Chancellor Angela Merkel’s government coalition, on Friday backed the
decision by the ECB that governments first need to apply for assistance
from bailout funds and agree to associated conditions before the central
bank will consider intervening in their bond markets.

FDP parliamentary leader Rainer Bruederle told German ARD
television in an interview that “it is right to tie [ECB action] to
conditions…insofar [ECB president Mario] Draghi has indeed set a
policy in motion which one can accept.”

Still, Bruederle, a former Economics Minister, added that “one must
be wary that a discussion will be started to bring down public deficits
by printing money.”

He stressed that “this is not the mandate of the ECB; it has solely
one mandate, namely to assure the stability of our currency.”

Meanwhile, German Deputy Finance Minister Steffen Kampeter said in
an opinion piece in the German daily Frankfurter Allgemeine Zeitung
published Friday that German financial liabilities for Europe’s planned
permanent bailout fund ESM “are limited to E190 billion.”

There cannot be any increase of that sum without previous approval
of the Bundestag, Germany’s lower house of parliament, Kampeter said.

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

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

EUR/USD:  1.2000, 1.2025. 1.2040

EUR/GBP: 0.7750

USD/JPY: 77.50

USD/CAD: 1.0000

AUD/USD 1.0600

Go figure. So much for risk-off Friday.

Italy’s FTSE MIB is the star performer, up a huge 3%.

Spain’s IBEX up hefty 1.9%.

EUR/USD has reached aforementioned (orderboard) sell orders clustered 1.2215/25.

Some buy stops above there before more notable sell orders around 1.2250.

Sometimes I wonder if I’ve learnt anything in my 6o years in the forex markets.

I’ve gone for 1.2100 in the latest EUR/USD poll.

I think nfp’s will come in stronger than the median 100k.

My reasoning for 1.2100 is that such a result will lessen US QE3 expectations and be supportive of the dollar.

I’ve just read a Dow Jones piece which quotes Citibank:

‘It adds that in the case of EUR, a strong employment report may help EUR/USD rally, while a weak report will cause the pair to sell off.’

One of us has faulty reasoning………   

I think I need a holiday……

A 4 month high, and up from 47.1 in June and above flash reading of 47.6.

Final July expectations falls to 50.0 from 52.1 in June  (lowest since July 2009)

Final July comp PMI 46.5 fractionally above flash and June’s reading of 46.4

And above Flash reading of 49.7.

Final July composite index 47.5 down from 48.1 in June, but above flash of 47.3

July sub-index services business expectations falls to 48.7 from 49.1

Fractionally below flash 48.0, but up from final 47.3 in June.

Services PMI 50.0, fractionally below flash 50.2, but up from final 47.9 in June.

Italy 5 year CDS 9 bps wider at 533 bps.

Down fractionally from 43.1 in June and below Reuters forecast of 43.5.

July future expectations sub-index  falls to 49.8 pointing to a  contraction for the first time in 14 years

As the 1.2400 parameter was blown out first yesterday from the latest 1.22-1.24 poll, it’s time for a new poll.  I was pleased to see I kept up my recent losing record

We sit at 1.2200.

What’ll we see first 1.2100 or 1.2300

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

From 43.4 in june  and above forecasts of 43.0, but still remains under 50.0 for over a year and leaves the country in a deep recession.

New business index fell to 40.8 from 43.1 in June .

This time I don’t even want the actual time of the announcement

Nearest answer gets a luvverly Forexlive t-shirt

– See Separate Tables For Details Of Individual Forecasts

TOKYO (MNI) – Japan’s gross domestic product in April-June is
expected to have posted the second straight quarterly rise, up a real
0.6% q/q, or an annualized +2.5%, backed by consumption and fiscal
spending, according to the median forecast by economists surveyed by
MNI.

But the pace of growth is expected to have slowed, compared with Q1
when GDP rose an annualized 4.7% q/q due to leap-year effects.

The Cabinet Office will release the Q2 GDP data at 0850 JST on
Monday, Aug. 13 (2350 GMT Sunday, Aug. 12).

Personal consumption, the largest component of GDP, is expected to
have risen 0.3% q/q in Q2, posting gains for five quarters in a row
after +1.2% in Q1 and +0.7% in Q4 of 2011, thanks to the government’s
subsidies for buying low-emission vehicles.

New car sales showed robust gains in Q2, up 92.0% y/y in April,
+66.3% in May and +40.9% in June.

Public demand is another driver of Q2 growth, up 0.8% q/q on
programs to rebuild the northeastern areas hit by the March 2011
earthquake disaster. It would be the third straight rise after +1.3% in
Q1 and +0.1% in Q4.

Public outlays for reconstruction of the disastered areas have
totaled around Y19 trillion, equivalent to about 4% of Japan’s nominal
GDP.

Business investment, a key component of private demand, appeared to
have risen 0.7% q/q, the first gain in two quarters, after -2.1% in Q1
and +5.2% in Q4.

Meanwhile, net exports, which pushed up GDP by 0.1 percentage point
in Q1, are expected to have made on contribution to the Q2 GDP.

The Q2 GDP is expected to show higher growth than the Japan’s
potential growth which is estimated to be about 0.5%, but economists are
not necessarily optimistic about the prospects in Q3 onward as funding
for the government subsidies for greener cars will be used up in August.

Yoshimasa Maruyama, chief economist at Itochu Economic Research
Institute, forecast that personal consumption will lose steam in Q3 and
drop in the final quarter of this year.

Ryutaro Kono, chief economist at BNP Paribas, agreed, saying, “The
pace of growth in GDP will clearly decelerate in the second half of this
fiscal year, but the economy is unlikely to enter a downturn phase.”

skodama@marketnews.com
** MNI Tokyo Newsroom: 81-3-5403-4838 **

[TOPICS: M$J$$$,M$A$$$,MAJDS$,MT$$$$]

Some more doom and gloom from Pimco’s  CEO… (Bloomberg)

Golly gosh!!!  Going from bad to worse.