Guess the bush telegraph was right then as it beats expectations of -20.0

ZEW says:

• Still expects German economy to lose momentum over the next 6 months

The barrier option interest at 1.2550 just got drilled!!!

I demanded it, and I got it. How d’ya like those onions?

I WILL NOT BE DENIED!!!

Today Suffolk, tomorrow the World….

Sold  a total of Eur 4.576 bln of  12 and 18 month T- bills out of a targeted Eur 3.5-4.5 bln

Eur 1.019 bln of 18 mth T- Bills, cover 3.56 (from 3.98), yield 3.072% (from 3.335%)

Eur 3.557 bln of 12 mth  T-bills, cover 2.03 (from 1.91), yield 2.835% (from 3.07% )

Lower yields and a full take up, largely as expected, but probably feed more complacency into the  Spanish politicians over a bailout

-Jul House Prices unch. m/m; +2.0% y/y

LONDON (MNI) – House price inflation eased in July, with England
the only country in the United Kingdom showing positive growth over the
last 12 months, figures released by National Statistics showed Tuesday.

House prices were unchanged on a seasonally adjusted basis
between June and July and were up 2% on the year, down from 2.3% in
June.

House price inflation in England eased from 2.8% to 2.4%, while
prices in Wales, Scotland and Northern Ireland were all down on the
year, by 0.2%, 1.1% and 10.9% respectively.

Pre-owned dwelling prices were flat on the month, while new
dwellings were down 1.4%.

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

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

Helping lift EUR/USD.

We’ve moved quickly back up to 1.3095 at writing.

Data due 09:00 GMT:  German ZEW survey for September. Economic sentiment expected -20 from previous -25.5.

I’m not hearing any specific number mentioned which makes me a little sceptical.

Take it for what you will.

-Aug CPI +0.5 % m/m; +2.5% y/y vs Jul +2.6% y/y;

LONDON (MNI) – Consumer price inflation eased slightly in August,
but upward pressure from petrol and energy bills suggest it is likely to
come in above the Bank of England’s latest forecast.

Recent rises in crude oil helped to push fuel prices up in August
and further increases here coupled with higher electricity and gas
prices over the coming months could mean inflation doesn’t ease by as
much as the BOE is forecasting.

Figures from National Statistics showed the Consumer Prices Index
rose 0.5% on the month in August and was up 2.5% on the year, compared
with 2.6% in July. This was in-line with the median forecast from City
economists.

The largest upward contribution to the change on the month came
from fuel and air transport. Petrol prices rose 3.5 pence per litre on
the month, while airfares were up 10% between July and August which is a
typical seasonal move due to demand for flights in the summer.

There was also upward pressure from clothing and footwear where
prices rose 2.8% on the month, adding 0.18 percentage point to the
monthly change in the CPI.

In the August Inflation Report the BOE forecast inflation to ease
to 2.35% in Q3 and 2.19% in Q4. To meet the Q3 prediction then CPI would
have to be broadly flat on the month in September, below the 0.7%
rise last year.

Moreover, fuel bills are set to rise higher than the BOE expected
in Q4, with energy supplier SSE having led the way by announcing a 9%
increase in both gas and electricity prices from Oct 15.

Core inflation, which excludes energy, food, alcoholic beverages
and tobacco fell to 2.1% in August from 2.3% in July, below the median
forecast of 2.2%.

In his opening statement to the Inflation Report, BOE Governor
Mervyn King said inflation was likely to be “around or a little below
target for much of the forecast period” but he rejected the view further
stimulus was needed now.

“Towards the end of the forecast horizon the balance of risks to
inflation around the 2% target is broadly balanced. That in itself does
not suggest an urgent need for further action,” King said.

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

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

UK DATA: Jul House Prices Unch. m/m; +2.0% y/y
————————————————————————
House prices remained stable in July with annual inflation easing to 2%
from 2.3% previously. This tallies with other data from private
providers which shows a flat picture for the housing market. Prices of
pre-owned dwellings were unchanged on the month while prices for new
homes fell 1.4% on the month.

UK DATA: Aug CPI +0.5% m/m; 2.5% y/y; vs Jul +2.6% y/y
————————————————————————
Consumer price inflation eased slightly in August, but upward
pressure from petrol and energy bills suggest it is likely to come in
above the Bank of England’s latest forecast. Recent rises in crude oil
helped to push fuel prices up in August and further increases here
coupled with higher electricity and gas prices over the coming months
could mean inflation doesn’t easy by as much as the BOE is forecasting.
The Consumer Prices Index rose 0.5% on the month in August and was up
2.5% on the year, compared with 2.6% in July. This was in-line with the
median forecast from City economists. The largest upward contribution to
the change on the month came from fuel and air transport. Petrol prices
rose 3.5 pence per litre on the month, while airfares were up 10%
between July and August which is a typical seasonal move due to demand
for flights in the summer.

UK Aug CPI  y/y at +2.5% from +2.6% in July but in line with Reuters expectations

Aug RPI +0.4%m/m, +2.9% y/y ( slightly below forecasts of  +3.1% y/y)

All goods  +1.8% y/y,  services +3.2% y/y

Cable’s showing little reaction around 1.6238

EUR/USD:  1.3175, 1.3200

GBP/USD:  1.6275,

AUD/USD: 1.0650

USD/CHF: 0.9225, 0.9200

EUR/AUD: 1.2550, 1.2600

Up from 9.42% in June

July bad debt load 169.33 bln euros.

So says the Bank of Spain.

Article by Arnaud Leparmentier  (now that’s a real French name)

• Crisis is caused by inefficiencies in the state
• Greek economy will have shrunk by 25% by the end of 2014, since the crisis began
• 2012 Budget will meet deficit target set by the ‘troika’
• Need to step up measures to combat tax evasion
• Unit labour costs have fallen 15% since 2010
• Greece has regained much competitiveness
• Talks with ‘troika’ are difficult

• Europe must recognise sacrifices, reforms Spain carrying out
• Some details still unclear on conditions of rescue
• Would be irresponsible to take decision without facts
• Part of Spanish spread not ‘fault’ of Spain
• Pensions ‘would be last thing’ govt cuts
• To study rescue if consequences acceptable for Spaniards

Meanwhile back at the ranch,  Spain 10 year govt bond yield above 6% at 6.03%

Spain goes to the well today.  Auctioning 3.5-4.5 bln 12,18 month t.bills.  Results due 08:30 GMT.

EUR/USD marked lower as above comments suggest Spain stalling on bailout.

Sell stops through 1.3080 and 1.3075 history and we’ve been as low as 1.3069.

Earlier was getting reports of buy orders clustered 1.3050/60. Guess further sell stops will be positioned fairly close below these orders, but don’t have confirmation of exact level/s.

Talk of barrier option interest up at 1.2550.

As I’ve gone with 1.2700 in the poll I demand that 1.2550 sucker gets drilled!!! Ya hear me? (can ya tell I’m bored?)

Currently sitting around 1.6245 ahead of this morning’s 0830 GMT inflation release where the market expects a m/m rise to 0.5% in August from 0.1% in July.

A strong number could test the 1.6275 barrier and further resistance lined up ahead of 1.6300, but the going looks heavy for now…

EUR/GBP’s continuing a steady slide after failing to hold above 0.8100 yesterday trading around 0.8068, but there are layered bids from 0.8050/55 down to 0.8000 to grind down…

DAX down -0.8%.

Meanwhile out east, Shanghai composite index has closed down -0.9%.

EUR/USD sits at 1.3097, effectively unchanged from when I first sat down.

Sell stops remain through 1.3080 and 1.3075 before buy orders clustered 1.3050/60 (said to include Asian sovereign interest)

Sell orders seen clustered up at 1.3130/50.

Maybe we can trade 1.3050-1.3150 for the rest of the week

When is that nice Mr Rajoy gonna ask for a bailout?

Italian 2 year notes up 4 bps at 2.39%.

No real surprise there. Who can afford a bloody new car!!

European (EU27+EFTA) car sales fell -8.5% in August. Down -6.6% in first eight months through August.

Meanwhile back at the thunderdome, EUR/USD looking a little vulnerable in early European trade, presently at 1.3090.  That said, it looked vulnerable yesterday before bouncing strongly.  Tricky little market at present as euro consolidates recent gains.

Sell stops seen through both 1.3080 and 1.3075, take your pick. What’s 5 pips between friends.

A Goldfish beauty pageant…

Only in China………….