Revised to -0.5% y/y from previous estimate of -0.4%.

Elsewhere,  Greek June unemployment at 24.4%, up from revised 23.5% in May

This pertains to the UK housing market.

Comes in the wake of earlier weak Halifax data.

Mate of mine was speaking with the manager of a large local estate agent.  Their 11 person sales team has sold/completed on a grand total of 4 houses in the past three and a half months.

Not surprisingly the manager is expecting a further 10-15% fall in UK house prices.

Eur  682 mln of 3.4% 2014 bonds, cover 2.01, yield 2.798% from 4.706% last

Eur 1.43 bln of 4.00% 2015 bonds , cover 1.76, yield 3.676% from 5.086%

Eur 1.39 bln of 4.25% 2016 bonds, cover 1.86, yield 4.603% from 5.971%

Full take up of targeted Eur 3.5 bln with string improvements in yields

-SMMT: UK Aug Car Registrations Up 0.1% y/y; 3.3% Year-to-Date

LONDON (MNI) – UK car registrations/sales were stable in August, a
quiet month for the sector, rising just 0.1% from a year earlier, the
Society of Motor Manufacturers and Traders reported today.

Registrations rose 3.3% in the year through August compared with
the same 8 months of 2011.

“New car registrations remained broadly stable in August, up 0.1%
on a year ago to 59,433 units. August traditionally represents a small
share of the new car market as motorists anticipate the arrival of the
new 62-plate in September,” said Paul Everitt, SMMT Chief Executive.

Everitt warned, however, that “The economic outlook remains
challenging.”

–London newsroom: 4417 862 7492; email: dthomas@marketnews.com.

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

10 year Spanish govt bond yield now off 16 bps at 6.25%

10 year Italian govt bond yield now off 9 bps at 5.43%.

BRUSSELS (MNI) – Sweden’s central bank Thursday cut its key
interest rate by 25 basis points to 1.25%, citing concerns that
protracted economic weakness in the euro area would soon dampen growth
in Sweden and that domestic inflation would be below target because of
stronger productivity and the recent strengthening of the krona.

“Growth in the Swedish economy is now slowing down after an
unexpectedly strong outcome so far this year,” the Riksbank said.
“During the summer the krona has appreciated faster than expected and
productivity has also been unexpectedly high. Inflationary pressures are
therefore expected to be lower than was forecast in July.”

By cutting its key interest rate, the central bank said it aimed to
“prevent inflation from being too low in the coming period,” compared to
its targeted rate of 2%.

The downbeat statement about the outlook for the Swedish economy
comes even as the Riksbank raised its overall forecast for 2012 from
0.6% to 1.5% because of suprisingly strong quarterly GDP growth of 1.4%
in 2Q.

“Swedish GDP growth has been unexpectedly strong so far this year,
which has mainly been due to a large increase in exports of services.
But the weak demand from the euro area will now dampen exports and
contributes to the forecast for weak GPD growth over the coming period,”
the Riksbank said.

“Economic developments in the euro area remain weak and it will
take time to rectify the underlying structural problems. The economic
downturn in the euro area will therefore be protracted,” the central
bank added.

Although it raised its forecast for CPI inflation this year from
1.1% to 1.2% the Riksbank lowered its estimate for 2013 from 1.7% to
1.3%, arguing that faster-than-expected appreciation of the krona and
unexpectedly high productivity growth would lower prices.

In order to prevent inflation from being too low, the Riksbank
lowered its forecast for the repo rate path saying it now saw the key
interest rate remaining at its current level until the middle of next
year, before rising gradually.

The Riksbank board said that risks to its forecast stemmed from the
uncertain situation in the euro area on the one hand, and the
possibility that the Swedish economy continues to prove resilient on the
other.

The central bank also cited the krona as a factor that could
influence developments and its monetary stance.

Thursday’s decision was backed by a majority of the central bank’s
board members, but deputy governors Lars E.O. Svensson and Karolina
Ekholm expressed reservations.

Svensson pushed for a more aggressive lowering of the repo rate to
1.0% and a lower repo rate path that stays at 0.75 per cent from the
fourth quarter of 2012 through the fourth quarter of 2013 before rising.

Ekholm also called for the repo rate to be cut to 1.0% over the
autumn but advocated that it stay at that level until the third quarter
of 2013.

[TOPICS: M$X$$$,MGX$$$,MT$$$$]

On the back of renewed optimism that ECB may announce unlimited government bond buying. Gold’s just notched a day’s high of 1711.80 as the metal also hits fresh 6 month highs.

Next levels of resistance, should the move continue, is up around the $1750, with tech support now moving up to around $1687.50 and $1675.00

The moves also helping shore up the AUD/USD which is nudging iup against some downward trendline rersistance from the Aug 23 highs around 1.0240/50. Day’s high so far has been 1.0249.

Spanish 10 year govt bond off 9 bps at 6.32%

Italian 10 year govt bond yield off 4 bps at 5.48%.

We’re seeing a risk on morning. Gold up nicely at 1,709 (models funds reportedly buying here). Oil up over a buck,  NYM light crude Oct2 at $96.53.

European stocks rallying fairly strongly led by Spain’s IBEX which is up 1.1%.

US treasury yields higher, benchmark 10 year up at 1.6198% from the 1.5977% which greeted me.

EUR/USD back up at 1.2630, only another 20 pips and I get a poll right Now if only the ‘moron’ sellers would move aside

LONDON (MNI) – UK Deputy Prime Minister Nick Clegg said this
morning that new moves to ease planning restrictions on house building
and alterations and to provide more help to house buyers as a ‘big set
of measures’ aimed at getting the economy moving.

In an interview with BBC Television, Clegg said that the UK was
suffering a “real crisis” in its construction sector but said there was
already some signs that some banks were starting to pass on the cheaper
funding costs provided by the Bank of England and Treasury in their
Funding for Lending Scheme which was launched at the start of August.

The new government measures are the latest effort to try and do
something at the margin to address the failure of the economy to recover
in response to monetary stimulus and to political calls for its
austerity policies to be diluted.

-London Bureau; tel: +442078627492; email: dthomas@marketnews.com

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

Their analysts see the ECB cutting leading rates 25 bps later today.

I have to say I wasn’t really expecting anything today.

So what do you lot think, ECB rate cut, or not…..

Forecasts..

Riksbank sees repo rate averaging 1.3% in in Q4 2012 from 1.4% previously,  1.4% in Q3 2013 from 1.6% and 2.2% in Q3 2014 from 2.4%

Riksbank

•  Krona had appreciated faster than expected and productivity had been unexpectedly high
• As economic activity improves and inflationary pressures increase, the repo rate will be gradually raised

LONDON (MNI), Sep 6 – The Bank of England Monetary Policy Committee
will sit on its hands at this month’s meeting and will sanction further
quantitative easing in November, but will not cut Bank Rate this year,
according to the results of an MNI/NTKN survey of economists.

The survey found unanimity among analysts that the MPC would leave
policy on hold this month. There is more widespread doubt over whether
the MPC will extend QE in November than over the likelihood of it
leaving Bank Rate on hold.

Of the 29 economists who gave a forecast for November, 19 expected
more QE while 10 did not, with the median forecast for a Stg50
billion increase. Only five of 27, however, predicted a cut in Bank Rate
this year.

When the June and July minutes of the MPC showed the committee
discussing the case for a rate cut, market speculation mounted that one
could be on the way. Most economists take the view the MPC is too
concerned about the potentially adverse effects of a rate cut to approve
one any time soon.

As economists at JP Morgan have pointed out, the MPC’s decisions on
a Bank Rate cut are not based on its likely aggregate effect on the
banking sector but are influenced by its potential impact on lenders,
particularly smaller lenders, which depend on deposits for funding.

If the BOE were to cut Bank Rate “the real issue is will deposit
rates be lowered on the back of this,” Allan Monks, economist at JP
Morgan, says.

If deposit rates don’t come down in line with the rate cut, margins
are hit. Lenders such as local building societies, which are heavily
reliant on attracting deposits to fund their lending, would run the risk
of being squeezed out of the market if rates come closer to zero, which
would be perverse at a time when the UK authorities are trying to
increase competition in the banking sector.

The Funding for Lending Scheme, under which the BOE will provide
banks with cheap funding in return for them maintaining or extending
lending, went live in August and may change the arithmetic. There is
widespread skepticism among analysts, however, that its likely impact
will be great enough to be a game changer for the MPC’s thinking on Bank
Rate in the months to come.

The spotlight instead is firmly fixed on QE and the November MPC
meeting.

The economy is struggling to claw its way out of recession and the
BOE in its August Inflation Report predicted flat growth this calendar
year despite penciling a sharp rebound in Q3, of some 1% on the
quarter.

More QE is likely this year because it is unlikely “the strength of
the recovery will be sufficient to make the BOE comfortable inflation
will meet its target in the medium term,” Joost Beaumont, an economist
at ABN Amro, says.

The current tranche of Stg50 billion of QE is on track to be
completed in the run up to the MPC’s November policy meeting and the
committee will have a fresh set of economic projections from its
quarterly forecast round at that meeting.

If the MPC decides at that stage the economy needs another
stimulus shot, the simple option is to sanction more QE.

As Beaumont notes, BOE Governor Mervyn King has publicly said a
25 basis point rate cut would be “neither here nor there”.

“Another quarter point on Bank Rate is not going to be the
difference between having a recovery, or not having a recovery,” King
said.

Things, however, have become a lot trickier for BOE watchers and
analysts’ views have become elusive to capture in straightforward
surveys, as the BOE extends its range of tools to support recovery.

In their research notes, some economists are already talking about
the BOE adopting such options as a “son of FLS” or “FLS2″ if the current
Funding for Lending Scheme does not do enough to boost credit flow.

The FLS is a joint project between the BOE and the Treasury and not
something the MPC has a vote on. Credit easing measures, which can be
extended or revised along the way, and have to dovetail with regulatory
changes, are all on the central bank’s policy menu.

Further stimulus from the BOE, if needed, may not be confined to
easy-to-tabulate QE or the questionable benefits of a rate cut.

As the MPC said in its August minutes, the committee would look a
the impact of the FLS and “the implications this had for other potential
policy options.”

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

[TOPICS: M$$BE$]

LONDON (MNI) – Analysts are united in the belief the Bank of
England Monetary Policy Committee will not extend quantitative easing
this month, with most expecting no change in policy until another Stg50
billion of QE is sanctioned at the November meeting.

The extension of QE in November is not viewed as a certainty. Of
the 29 economists who gave a forecast for November, 19 expected more
QE in November while 10 did not, with the median forecast for a Stg50
billion increase.

QE remains the MPC’s favoured stimulus tool. Most analysts expect
Bank Rate to be left on hold at 0.5% this year, with only five of the 27
surveyed predicting a 25 basis point cut.

The table below shows analysts’ forecasts:

Level BOE Level BOE
QE Bank QE Bank
Sep Rate Nov Rate
stg Sep stg Nov
bln % bln %
————————————————————————
Median 375 0.5 425 0.5
Mean 375 0.5 408 0.5
High 375 0.5 450 0.5
Low 375 0.5 375 0.25
————————————————————————
Number Responses 31 27 29 27
————————————————————————
4Cast 31-Aug 375 n/a 375 n/a
ABN Amro 05-Sep 375 0.5 425 0.5
Barclays Capital 31-Aug 375 0.5 425 0.25
Berenberg 31-Aug 375 n/a 375 n/a
BNP Paribas 31-Aug 375 0.5 425 0.25
BoA-ML 31-Aug 375 0.5 n/a 0.5
Capital Economics 31-Aug 375 0.5 425 0.25
CEBR 31-Aug 375 0.5 425 0.5
Citi 31-Aug 375 0.5 425 0.5
Commerzbank 31-Aug 375 0.5 n/a 0.5
Daiwa 31-Aug 375 0.5 425 0.5
Danske 31-Aug 375 0.5 375 0.5
Deutsche 03-Sep 375 0.5 375 0.5
HSBC 31-Aug 375 0.5 375 0.5
IHS Global Insight 15-Aug 375 0.5 425 0.5
ING 31-Aug 375 0.5 450 0.5
Investec 31-Aug 375 0.5 425 0.5
Jeffries 31-Aug 375 n/a 425 n/a
JP Morgan 05-Sep 375 0.5 425 0.5
Lloyds 31-Aug 375 0.5 425 0.5
Monument 05-Sep 375 0.5 425 0.5
Natixis 31-Aug 375 n/a 375 n/a
Nomura 31-Aug 375 0.5 400 0.5
Rabobank 03-Sep 375 0.5 375 0.5
RBC 05-Sep 375 0.5 425 0.5
RBS 03-Sep 375 0.5 425 0.5
SEB 05-Sep 375 0.5 425 0.5
Soc. Generale 05-Sep 375 0.5 425 0.25
Standard Chartered 31-Aug 375 0.5 375 0.5
UBS 31-Aug 375 0.5 375 0.25
Westpac 31-Aug 375 0.5 375 0.5
————————————————————————

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

[TOPICS: M$$BE$,MTABLE]

FRANKFURT (MNI) – Ahead of the ECB Governing Council meeting
Thursday, Spanish Prime Minister Mariano Rajoy said Spain needs a “quick
solution” that will remove doubts about the euro and help Spain
refinance its debts more cheaply.

In an interview with German daily Frankfurter Allgemeine Zeitung,
Rajoy said risk premiums and yield differentials were “destroying”
Spain’s efforts at fiscal reform, though he also said his government
remains committed to reaching the EU Commission’s target of a 6.3%
budget deficit for this year.

Rajoy did not say — nor was he asked — whether or
when Spain planned to apply for a further aid program under the ESM
rescue fund, which the European Central Bank has set as a condition for
intervening in bond markets.

The ECB’s “mandate is to keep inflation under control. But I think,
guaranteeing that a functioning monetary union also belongs to this,”
said Rajoy, who will be meeting with German Chancellor Angela Merkel
later Thursday in Madrid.

Noting Spain’s heavy refinancing needs toward the end of this year,
Rajoy said lowering bond yields was “urgent and necessary. The risk
premiums are not the result of the fundamentals of the Spanish
economy, but of doubts about the euro. That is why I focus so much on a
quick solution.”

Rajoy said 2012 economic activity in Spain could be “somewhat
better” than the government’s forecast of a 1.7% contraction, and said
“I hope that next year for many reasons will turn out better.”

“It is especially important that all the uncertainties around the
euro are removed and that we can once again refinance at reasonable
rates,” Rajoy said.

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

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

• Long-term unemployment rising fast in EU

Official speaking at conference in  Brussels.

EUR/USD slips lower as ‘morons’ seen selling up around 1.2630

They just don’t want me to get a poll right.

We’re down at 1.2604.

Buy orders clustered 1.2580/90, sell stops through 1.2570.

–Down 0.4% M/M; Down 0.9% 3M Y/Y; Underlying Trend Also Weaker

LONDON (MNI) – UK house prices were down on both the month and the
year in August, according to the latest House Price Index from the
Halifax.

The data continued the falls seen last month in the Halifax series.
In July prices had fallen 0.6% on the month and 0.6% on the year.

House prices in the three months to August were down 0.3%
from the previous three month period, compared with a fall of 0.1% in
the three months to July.

The UK’s two main house price indices appeared to diverge last
month, with the Nationwide showing the largest monthly rise since 2010 –
up 1.3% from July.

Commenting on the data, Martin Ellis, housing economist, said:

“Nationally, house prices continue to tread water, as measured by
the underlying trend. Prices in the three months to August were
fractionally lower (-0.3%) compared with the previous three months.
House prices fell by 0.4% in August with the declines in the past two
months largely offsetting the gains in the preceding two months.

“Overall, there has been little change in house prices so far this
year with the UK average price in August at a very similar level to the
end of 2011. A gradual upward trend in spending power, aided by lower
inflation, should help to support housing demand in the coming months.
Nonetheless, house prices are likely to remain flat over the remainder
of 2012 and into next year.”

–London newsroom: 44207 862 7492; ukeditorial@marketnews.com

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

Weaker than Reuter’s median forecasts of unchanged, -0.8% respectively.

• Spain has taken steps to make pensions sustainable
• Unemployment in Spain is ‘absolutely unacceptable’ 
• Spanish economy will return to growth ‘with intensity’

Speaking at a Spain-Germany business seminar (Bloomberg)

Gotta admire his confidence if nothing else..

FRANKFURT (MNI) – A majority on the European Central Bank’s
Governing Council appears on the brink of yielding to political
pressure, thus disregarding the central bank’s core mandate and
independence, former ECB Executive Board member Juergen Stark warned in
a commentary published on Thursday.

“The political pressure on the central bank is massive,” Stark said
in today’s issue of Die Welt.

Stark criticized ECB President Mario Draghi’s announcement last
month that the ECB would consider outright bond buys if governments
under pressure accepted financial assistance via the European bailout
fund.

“Monetary policy must not be conditional,” Stark said, adding that
the central bank risked stepping beyond its mandate.

Stark reiterated his opposition to the ECB’s bond-buying program,
stressing that the Eurosystem was taking on “enormous risks” with the
purchase of government debt and that the separation of monetary and
fiscal policy had already become blurred.

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

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

EUR/USD: Bids 1.2580/90, sell stops through 1.2570 ahead of tech supp at 1.2562-100 day MA. Offers 1.2630/50 from SNB/Dutch related names (barrier 1.2650), buy stops above.

GBP/USD:  Bids 1.5890/00 and 1.5850/60. Offers from 1.5930/40 and 1.5990/00 (1.6000 suggested barrier).

 EUR/GBP:  Tech level 0.7904 (55 day MA) Bids 0.7890/00. Offers 0.7940/50 and 0.7960/70

 USD/JPY:  Bids 78.30/40, stronger bids 78.00/10 (Kampo, importers, life co's) with large sell stops through 78.00 and 77.90. Offers from 78.50, tech res 78.67 (cloud base) and more offers 78.80/00 (exporters, real money and US funds 78.90- 55 day MA), buy stops just above ahead tech res 79.14 cloud top, 200/100 day MA's at 79.30 and 79.26

 EUR/JPY: Offers 99.00/10 ahead of tech res 99.55/60 (99.58 100day MA) and offers 99.90/00 (100.00 barrier). Bids 98.50/60 and 98.00/10 sell stops below ahead of tech supp 97.88(cloud top).

 AUD/JPY: Offers 80.20/30 ahead of tech res 80.80/00 (80.81 100 day MA, cloud top 80.93). Bids 80.00/10 possible fresh sell stops through 80.00 ahead of bids 79.70/80, sell stops below through 79.50

 EUR/CHF: Bids 1.2035/45 and 1.2000/10 (SNB), Offers 1.2050/60 (tech lvl 200 day MA 1.2063) and 1.2070/80

 USD/CHF:  Bids 0.9500/10 (suspected SNB related). Offers 0.9560/70 and 0.9600/15

 AUD/USD:  Offers 1.0240/50 and  1.0280/00, buy stops above ahead of 200 day MA at 1.0316. Bids 1.0190/00 (100 day MA 1.0200), sell stops below and through 1.0170 ahead of bids 1.0150/60 and more sell stops through 1.0150.

 EUR/AUD:  Offers 1.2340/50 ahead of more offers/tech res  1.2385/90. Bids 1.2300/20, tech supp 1.2240/45 and 1.2210/15

 NZD/USD:   Tech res/offers 0.7990/00 (0.8001- 200 day MA), offers above 0.8030/40. Tech support 0.7925/35 (100 day MA 0.7925) bids 0.7915/25sell stops below through 0.7900 ahead of tech supp 0.7850/60