FRANKFURT (MNI) – The German government confirmed that it will sell
E2.0 billion in new 2023, 0.1% inflation-linked bond on Wednesday, March
21, the Bundesbank announced on Tuesday.

Bids are to be submitted by 11:00 GMT on Wednesday, with results of
the allocation to be announced shortly thereafter.

The linkers will settle on Friday, March 23 2012 and mature on
April 15, 2023.

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

[TOPICS: M$G$$$,M$$FI$,MGX$$$]

BERLIN (MNI) – Germany’s CDU/CSU-FDP governing coalition has agreed
how parliament will be involved in future decisions on rescue measures
by the European Stabilisation Mechanism (ESM), the Eurozone’s permanent
rescue fund.

The full lower house of parliament, the Bundestag, will normally
vote on those measures, the German daily Die Welt reported Tuesday. Only
in cases of urgency, it will suffice that the budget committee of the
Bundestag approve the measures, the paper wrote. Decisions on bond
purchases by the ESM will be handled behind closed doors by a
nine-member parliamentary committee.

The German cabinet last week approved the country’s share of the
financing for the E500 billion ESM. Germany will contribute some E21.7
billion of paid-in capital and some E168.3 billion of callable capital.

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

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

USD/JPY up at 83.73 from around 83.43 when I sat down first thing.

Talk is Korea has been a notable buyer in this leg higher.

Just incase the rally accelerates, recent talk has had barrier interest lined up at 84.25 and then 84.50.

From -36 pts in February.

Well something to liven a deadly boring morning.

This rumour is apparently part of the reason the dollar is getting a general lift (risk aversion)

AUD/USD down at 1.0518 from around 1.0565 when I parked my bum.  Stops were tripped through 1.0550 accelerating the sell-off.  Model funds notable sellers.

GERMANY DATA: Producer price inflation slowed to +0.4% on the month in
February, down from both January’s rate and the median forecast, which
were both at +0.6%. On the year, producer prices were up 3.2%.
– Germany February PPI below MNI median y/y fcast (+3.3%)
– Germany February PPI ex-energy +0.4% m/m, +1.6% y/y;
– Germany February PPI ex-petroleum products +0.2% m/m, +2.6% y/y
– Germany February PPI energy +0.5% m/m, +6.9% y/y
– Germany February PPI cap goods unch m/m, +1.1% y/y
– Germany February PPI cons goods +0.4% m/m, +3.5% y/y
– Germany February PPI basic goods +0.5% m/m, +0.5% y/y
– See MNI MainWire for details

Pretty much in line with median forecasts +0.5%, +3.2% respectively.

• Many local governments still targetting growth above 10%
• ‘Moderate slowdown’ is the logical path for Chinese economy
• China should keep prudent monetary policy
• Rate moves should depend on long-term inflation trend
• Yuan may become fully convertible around 2020

Love him or loathe him, latest from AEP at The Telegraph.

–UK Petrol Prices Up 1.2% On Month In February

LONDON (MNI) – The surge in petrol prices in February is a shade
less than the increase seen in the same month a year ago, entailing it
will have negligible impact on the change in the yearly inflation rate.

Petrol prices rose 1.2% on the month in February according to the
Market News Petrol Price Index, but were up 1.3% on the month in
February 2011, resulting in near zero impact on the yearly change in
February CPI.

Analysts’ median forecast is for February CPI, out Tuesday at 0930
GMT, to fall to 3.3% from January’s 3.6%.

Below are the results of the MNI petrol price index:

% change m/m 2012 2011

! Feb ! Jan ! Dec ! Nov ! Oct ! Sep ! Aug
————————————————————————
MNI PETROL PRICE INDEX 1.2 0.5 -0.3 0.2 -0.1 -0.1 0.5
ONS FUELS/LUBRICANTS n/a 0.5 -0.6 -0.5 -0.2 -0.2 0.7
MNI Index Contribution
to CPI y/y Change 0.0 -0.16 -0.13 -0.06 -0.08 0.03 0.06
ONS F/L Contribution
to CPI y/y Change n/a -0.16 -0.14 -0.09 -0.08 0.03 0.07

—London Bureau; Tel: +44207 862 7491; email: drobinson@marketnews.com

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

Financial bookies see FTSE, DAX and CAC 40 opening -0.1 to -0.2% lower this morning.

PMI (flash) Consumer Morale
– March – (flash)
mfg svc – March -

Median Forecast 49.5 49.2 -20.0
High forecast 50.2 50.5 -7.0
Low forecast 47.5 47.5 -21.0
Previous period 49.0 48.8 -20.3
-
Number of responses 20 20 6
-
4Cast 49.5 49.0 -20.0
ABN AMRO 49.2 49.0 n/a
Barclays Cap. 49.8 50.5 -20.1
Berenberg Bank 49.5 49.2 n/a
BNP Paribas 49.4 49.3 -20.0
BoA-ML 49.5 49.5 n/a
Capital Economics 49.5 48.5 n/a
Citi 48.5 48.0 -21.0
Commerzbank 49.5 49.5 -7.0
DZ Bank 49.0 47.5 n/a
Danske 49.7 49.3 n/a
ING 48.7 49.0 n/a
Lloyds Bank 49.5 49.4 n/a
LBBW 49.6 49.3 -19.5
Natixis 49.4 49.0 n/a
Soc. Generale 50.2 49.0 n/a
Standard Chartered 48.8 48.6 n/a
UBS 47.5 49.2 n/a
Unicredit 49.6 50.1 n/a
West LB 48.8 49.2 n/a

———————————————————————–
* Median is based on above forecasts and is not intended to represent
a consensus.

The survey was conducted on Friday, March 16.

[TOPICS: MTABLE,M$GDS$,M$G$$$,M$XDS$,M$X$$$]

Producer Prices PMI (flash)
– February – – March –
%mom %yoy mfg svc

Median Forecast 0.6 3.3 51.0 53.0
High forecast 0.9 3.6 51.5 54.7
Low forecast -0.2 3.2 49.8 51.5
Previous period 0.6 3.4 50.2 52.8
-
Number of responses 11 9 15 15
-
4Cast 0.4 3.2 50.8 53.1
Barclays Cap. 0.6 3.3 51.5 54.7
Berenberg Bank n/a n/a 51.0 53.1
BNP Paribas 0.7 3.4 n/a n/a
BoA-ML n/a n/a 50.5 52.8
Capital Economics 0.7 3.5 n/a n/a
Citi 0.4 3.2 n/a n/a
Commerzbank n/a n/a 50.5 53.5
DZ Bank -0.2 3.3 50.5 51.5
Danske n/a n/a 51.2 52.9
ING n/a n/a 51.0 52.8
Lloyds Bank n/a n/a 51.0 53.0
LBBW 0.7 n/a 51.5 53.5
Natixis 0.5 3.2 51.0 53.2
Standard Chartered 0.5 3.2 49.8 51.8
UBS 0.8 n/a 50.5 52.5
Unicredit n/a n/a 51.0 52.5
West LB 0.9 3.6 50.2 53.2

———————————————————————
* Median is based on above forecasts and is not intended to represent
a consensus.

The survey was conducted on Friday, March 16.

[TOPICS: MTABLE,M$GDS$,M$G$$$,M$XDS$,M$X$$$]

PMI (flash) Industry
– March – Morale
mfg svc – March -

Median Forecast 50.2 50.5 93
High forecast 50.8 51.3 94
Low forecast 48.6 49.0 91
Previous period 50.0 50.0 95
-
Number of responses 13 12 9
-
ABN AMRO n/a n/a 94
Barclays Cap. 49.6 51.3 n/a
Berenberg Bank 50.5 50.6 93
BNP Paribas n/a n/a 93
BoA-ML 50.5 n/a n/a
Capital Economics n/a n/a 91
Citi n/a n/a 93
Commerzbank 50.5 51.0 n/a
DZ Bank 50.0 49.0 n/a
Danske 50.3 50.2 n/a
Lloyds Bank 50.4 50.6 93
Natixis 50.0 50.0 n/a
Soc. Generale 50.8 50.6 93
Standard Chartered 49.0 49.0 93
UBS 48.6 50.3 n/a
Unicredit 50.2 50.4 93
West LB 50.0 50.6 n/a

———————————————————————–
* Median is based on above forecasts and is not intended to represent
a consensus.

The survey was conducted on Friday, March 16.

[TOPICS: MTABLE,M$GDS$,M$G$$$,M$XDS$,M$X$$$]

Got any ideas you’d like to share with your fellow readers, then here’s where to stick ‘em.

• BHP CEO of iron ore:  Chinese steel growth has flattened
• BHP Chairman: We are reassessing investment projects due to slower China
• RBA minutes: downside risks ‘somewhat less likely’ to materialize
• PBOC adviser: yuan could be convertible by 2016-2020
• BuBa’s Nagel: Banks must be weaned off easy money
• China telecom misses analyst estimates
• Japan closed for holiday
• Shanghai composite ends morning down 0.77%
• USD leads, AUD lags

Maybe BHP is playing games because they’re upset about a mining tax or maybe they’re being honest but AUD traders scrambled to the exits before asking too many questions. AUD/USD fell to 1.0552 before possible buying from a reserve manager sparked a small rebound to 1.0578.

EUR/USD was caught in the middle after a breakout in EUR/AUD balanced initial selling on the AUD/USD drop. Overall, the downward chop the began in the second part of US trading continued, at 1.3236 last.

Overall, the Japanese holiday kept a tight lid on the market with the majors fairly close to opening levels.

Gold down 0.4% to $1658.

The lone event to watch on the calendar comes at 0930 GMT when the UK releases February CPI. I inflation is expected to slide to 3.3% y/y from 3.6% in January, with core at 2.3% compared to 2.6%.

The BOE is expecting inflation below 2% by the end of the year. Recent comments suggest some upside risk due to energy prices and better growth. The trend in UK inflation has been lower from 5.2% in September and a small setback is unlikely to change opinions at the BOE. A deeper-than-expected fall could spark some GBP selling.

Relentless move as AUD/USD takes out support from the US low of 1.0558, touching 1.0552 with some bids evidently above 1.5050 sparking a rebound to 1.0561.

The market is thin today, granted, but the drop in AUD is getting hefty. BHP is seeing a slowdown in China and it’s bad enough that they are thinking about curbing investment plans in Australia.

I don’t know if the economic data in China is crooked but I know that traders don’t trust it. They would rather take the word of the BHP CEO than anyone at a Chinese statistical agency.

Something to keep in mind.

The BHP story continues to circulate in a thin market. Technical momentum and buy stops are exaggerating the moves with EUR/AUD breaking above tje triangle formation it’s been building for the past month.