Few surprises there…… but its a record high on the back of the austerity measures which is  taking a lot out of the labour market

Morning all, another day in paradise….

EUR/USD: Tech res (21 DMA 1.3239) and offers  1.3240/50, 1.3260/65( 100 day MA 1.3265), 1.3300/05 and 1.3330/35. Bids 1.3165/70, tech support  1.3135/40 and 1.3095/05

GBP/USD:  Res  1.5845/50 and 1.5880/85 (200 DMA 1.5883). Bids 1.5785/90

EUR/GBP: Tech Supports 0.8245/50 (55 DMA 0.8347) and 0.8340/45, bids 0.8320/25. Offers  0.8360/65 and 0.8380/85

USD/JPY: Bids 81.25/30 (corporates),  81.00/10 (poss ACB). Offers 81.55/65 possible stops just above ahead of tech res 81.85/90

EUR/JPY:  Res 107.85/90 and 108.05/10. Tech support 107.00/10 and 106.75 (200 DMA)

AUD/USD: Offers 1.0690/95 (14 DMA at 1.0694), 1.0740/45,  Bids 1.0605/15

GOLD: Tech res  1709 (Mar 6 high), 1716.85 (Mar 5 high). Tech support 1694.65 (100 DMA) and 1671.35

Stops gone off through 1.3210 and we’ve been as high as 1.3227, presently at 1.3215.

Sell orders now clustered up at 1.3240/50.

Technical levels of interest 1.3239 (21 dma) and 1.3265 (100 dma)

That was exciting.  I’d like it to quiet down now. I’ve got some meditation to do……

Down  presently at 297 bps from the 313 that greeted me first thing.

First time below 300 bps since September 2011.

EUR/USD up at 1.3200.

Joe is climbing the walls.  1.3205 is sooo close he can taste it   1.3204 the high on EBS.

• FX purchases with Swiss, international counterparties
• Purchases were made to ‘combat massive overvaluation’

Bloomberg reporting.

US non-farm payrolls looming.  So hit this link and give yourself the chance to win a lovely ForexLive t-shirt!!!

Another barnstorming start to European trade.

EUR/USD sits at 1.3172, 4 pips lower than when I sat down.  We’ve been as high as 1.3184 so far, just shy of aforementioned sell orders at 1.3190/00.

Sources note Korea has been selling both EUR/USD and EUR/GBP in recent trade.

Joe say’s why don’t they just bugger off out of the way!!!

Not a milion miles away from Reuter’s median forecasts +0.2%, -0.9% respectively.

Down at 305 bps from the 313 I jotted down first thing.  

Spanish/German 10 year govt bond yield spread narrows to 320 bps from the 330 I jotted down first thing.

Slightly weaker than Reuter’s median forecast of -5.2 bln.

FRANCE DATA: January sa trade deficit widened to E5.324 bln from
E5.052 bln in December (revised from -E4.993 bln).
–Deficit higher than expected; MNI survey median forecast -E4.8 bln
–January sa exports +1.5% m/m; sa imports +2.0% m/m

From 96 in January, weaker than median forecast of unchanged 96.

Bank confirms estimate for flat Q1 GDP growth.

Crap, a whole morning of this happy horseshit ahead of me 

EUR/USD up at 1.3172 from North American close Wednesday down around 1.3145. Talk in Asia of early Chinese rrr cut of upto 50 bps has helped underpin general risk appetite. 

Sell orders now seen clustered 1.3190/00, buy stops through 1.3210.  If they get triggered before we see 1.3065 (ala yesterday’s poll) then Joe “The Guru” Brown will have increased his street cred even further.  Heaven help us, he’ll be even more intolerable

LONDON (MNI) – Analysts’ consensus view is the Bank of England
Monetary Policy Committee will not extend quantitative easing at its
March meeting, with a substantial minority still believing the MPC will
increase QE at its May meeting.

Analysts cite the recent flood of public remarks by MPC members as
supportive of their case for no further stimulus in May. The minority
views are that either the economy will turn out weaker than the MPC
expects, tilting the scales to more stimulus, or that the committee will
repeat the pattern of the first wave of QE, winding down the second wave
with a final stg25 billion increase.

A Market News/NTKN survey found none of the 37 economics teams
covered expected any policy change from the MPC this month. Of the 31
which gave a forecast for May, 17 expected no increase in QE and 14
forecast QE would be extended, with the median forecast for no
change.

Alan Clarke, economist at Scotia Capital, sets out the majority
view, that the MPC’s recent comments “support the view they will finish
QE (extended in February) after three months.”

He says no extension in May is not a done deal but “you would need
to have a radical departure from their central forecast” for the MPC to
sanction more stimulus.

The central, modal projection in the MPC’s February Inflation
Report showed CPI falling from 3.35% in Q1 to a trough of 1.61% in Q1
2013 and rising to 1.78% by Q1 2014, the end of the two year forecast
horizon.

In theory, that leaves a little scope for further stimulus to push
CPI up to hit the 2.0% CPI, but the projections show inflation on a
rising trend and MPC members have stressed they are not in the business
of fine-tuning policy.

Simon Hayes, economist at Barclays Capital, is not expecting any
further QE now or in May. He says that so far the economy has evolved
“pretty much in line with the MPC’s central forecast”.

Hayes notes that even the MPC’s arch dove, Adam Posen, who
spearheaded the drive for the second wave of QE, said in recent evidence
to the Treasury Select Committee that the February Inflation Report
forecasts were close to his own, and as the report showed the risk of
inflation coming in above/below target was broadly balanced this
suggests even Posen may not vote for more stimulus.

“I do share now … the modal forecast for the Committee and the
Inflation Report broadly, which means I do think the risks are balanced.
I am slightly more worried that it will go on the downside,” Posen told
the TSC.

Another member of the MPC, Martin Weale, used a recent speech to
say he did not believe he was likely to vote for further QE but his
colleague, David Miles, muddied the waters by making the activist case
for aggressive stimulus to boost activity now and bring forward the
timing of the first rate hike.

“Aggressively loosening monetary policy now might bring us closer
to the point at which Bank Rate could be moved back towards a more
normal level … This is an argument that influences the way I see
monetary policy today,” Miles said.

John Hawksworth, head of PwC Macroeconomics, says their central
scenario is based on the assumption the MPC will not do any further QE.
Hawksworth’s PwC colleague, ex-MPC member Andrew Sentance, also believes
QE will not be extended based on his interpretation of his former MPC
colleagues’ recent remarks.

Hawksworth says there are diminishing returns to QE as Gilt yields
are driven lower and lower and “we don’t think the latest stg50 billion
is going to make a great difference at the macro level.”

PwC expects 2012 growth to come in a little weaker than the BOE is
expecting, at around 0.6% compared to the central bank’s O.9%, but it
sees growth strengthening in the second half.

If the MPC does not do more QE by May, the case could diminish if
the economy strengthens as expected as the year progresses.

Some of those analysts forecasting further QE cite the experience
of late 2009. The MPC wound up the first wave of QE by sanctioning a
stg25 billion increase, even though the BOE’s inflation forecast at the
time was not readily compatible with such a move.

Hayes, however, believes the MPC this time around may be more
confident that it can stop and start QE as required and that as it is
explicitly opposed to fine tuning it will not go for a smaller final
tranche.

In the first wave of QE there was concern about how the market
would react to it coming to a sudden halt.

In any event the March MPC decision, with policy left on hold, is
seen by all analysts as a foregone conclusion, with the announcement due
at 1200 GMT Thursday.

–London bureau: +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 but they are split over what will happen in May, the next key
decision month.

A Market News/NTKN survey found none of the 37 economics teams
covered expected any policy change from the MPC this month. Of the 31
which gave a forecast for May, 17 expected no increase in QE and 14
forecast it would be extended, with the median forecast showing no
change.

All eyes are on May as the MPC will have completed its next
quarterly forecast round ahead of that meeting and voting history shows
it is far more likely to change policy in forecast round months.

Please see the accompanying report for analysts’ views.

The table below shows analysts’ forecasts:

BOE BOE
QE QE
March May
Meeting Meeting
Total Total
Stg bln Stg bln
————————————————————————
Median Forecast 325 325
High forecast 325 375
Low forecast 325 325
Previous period 325 325
————————————————————————
Number of responses 37 31
————————————————————————
4Cast 325 325
ABN Amro 325 n/a
Barclays Capital 325 325
BNP Paribas 325 325
BoA-ML 325 325
Capital Economics 325 375
Commerzbank 325 n/a
Danske 325 n/a
Deutsche 325 350
HSBC 325 325
ING 325 375
IHS Global Insight 325 350
Investec 325 375
Jeffries 325 325
JP Morgan 325 350
Lloyds TSB 325 375
LBBW 325 n/a
Monument 325 325
Moody’s Analytics 325 375
Morgan Stanley 325 375
National Australia Bank 325 350
Nomura 325 350
Oxford Econ 325 325
PwC 325 325
Rabobank 325 325
RBS 325 325
RBC 325 325
RIA 325 325
Schroders 325 375
ScotiaCapital 325 325
SEB 325 325
Soc. Generale 325 n/a
Standard Chartered 325 375
Sumitomo Mitsui 325 325
UBS 325 n/a
West LB 325 325
Westpac 325 375

————————————————————————

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

[TOPICS: M$$BE$,MTABLE]

FRANCE DATA: 4Q private sector payrolls revised to -0.1% q/q (-0.2%)
- 3Q private sector payrolls revised to -0.2% q/q (flat)
- Total 4Q payrolls -0.1% q/q, +0.4% y/y (1st estimate)

Ker-ching.

Profit is due to a rise in the value of the bank’s gold holdings and it’s foreign currency positions.

• Expect BOJ to continue sending message to markets if it has strong determination to beat deflation

USD/JPY trading around session high 81.39.

Sean overnight mentioned sell orders clustered 81.60/70 and then ofcourse we have the well-documented 82.00 barrier interest.

Financial bookies see FTSE up around +0.2%, DAX up around +0.6% and CAC 40 up round +0.4%.