Unchanged from revised 11.3% in June (prev 11.2%) and in line with median forecast.

Euro zone August inflation estimated at 2.6% y/y vs 2.4% in July, stronger than median forecast of 2.5%.

Euro bulls have managed to trip buy stops through 1.2540 and we’ve moved quickly to 1.2558.

Sell orders remain up at 1.2580/00 ahead of 1.2600 barrier option interest.  More buy stops above there.

At the end of the day we remain ensconsed within 1.2450-1.2600 range.

Italy’s FTSE MIB and Spain’s IBEX leading the way, both up around +0.8%.

Ok I know it’s nothing major, but there’s diddly squat going on.  Got to grasp hold of every straw

EUR/USD slowly grinding through aforementioned 1.2520/40 sell orders, presently at 1.2527.

Will we reach the buy stops through 1.2540?

Does anyone really give a shit?

And she’s gonna ask same of Spain

According to report in Spain’s daily El Mundo today.

Where I come from we call that “talking ones’ book”

FRANKFURT (MNI) – Inflation expectations have remained
well-anchored despite recent market uncertainties and the provision of
liquidity by the European Central Bank, signalling that trust in the
euro as a currency remains strong, ECB Executive Board member Benoit
Coeure said Friday.

In a speech here on the use of inflation-indexed securities as a
gauge of expectations, Coeure said the well-anchored inflation
expectations also probably reflected continued negative output gaps in
the Eurozone.

“Looking at the developments in market-based measures of medium to
long-term inflation expectations in the euro area during the crisis,
inflation expectations seem to be well-anchored in spite of market
turbulence and uncertainties regarding future developments,” he said.

“For the euro area in particular, inflation expectations have
remained very well anchored following the non-standard liquidity
provision measures undertaken by the ECB. The anchoring of expectations
at relatively low levels probably reflects continued negative output
gaps in the euro area as well as confidence that the ECB will be able
and willing to drain liquidity if and when necessary to control
inflation,” he said.

“In a nutshell, it is evidence that the euro area financial crisis
has not eroded trust in the euro as a currency,” Coeure said.

While expectations remain anchored, Coeure noted that
inflation-indexed securities “have not escaped the trend towards
fragmentation which has been a common feature of euro area capital
markets throughout this crisis.”

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

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

Zerohedge

It’s a good day, I’ve actually learnt something.

Hahnchen in German means chickens

NOTE TO SELF:   Make sure to be on holiday Sept 12/13/14th.

Or rather Bernanke.

EUR/USD sits at 1.2512, aforementioned buy orders clustered down at 1.2480/90 having provided a brickwall against the early slippage.  Sell stops through 1.2480.

So what we got on the topside now.

Talk of sell orders lined up 1.2520/40, with buy stops above there.

European stocks have reversed early losses. Best performing index Italy’s FTSE MIB up +0.5%.

And I mean “marginally”

We’re at 1.0308 from the 1.0295 which greeted me.

Talk an ACB has been notable buyer early. They’re going somewhat against the prevailing trend, but hey….

PARIS (MNI) – The European Commission’s proposal for a Eurozone
banking union foresees a step-by-step extension of coverage starting
with publicly controlled banks at the start of next year, Michel
Barnier, the commissioner for the internal EU market, said in a
newspaper interview published Friday.

Big banks with potential systemic impact would be brought under
supervision by an independent council within the ECB by mid-year,
Barnier told the French business daily Les Echos. By the start of 2014,
some 6,000 Eurozone banks would be integrated into the new system.

Commission President Jose Manuel Barroso indicated Thursday that he
would unveil details of the plan on September 12.

By targeting banks under public support first, the proposal would
allow an eventual recapitalization via the European Stability Mechanism
at an early stage, Barnier explained.

“Thanks to the possibility of recapitalizing the banks directly by
the European bailout funds, we are cutting the link that adds banking
debts to those of the sovereigns,” he said.

The council for bank supervision within the ECB would be separated
from the Governing Council, Barnier said. “The president of the
supervisory [body] will be accountable to the European Parliament in
order to permit democratic control over this new organism.”

Supervisory matters without consequence for financial stability,
like consumer protection, would be left to national supervisors, he
added.

Barnier said he hoped that after a “sincere” public debate on the
proposal there would not be resistance from certain members of the EU.
The Commission is working on the possibility to allow banks of
non-Eurozone member states to be brought on board “on a purely voluntary
basis,” he said.

Proposals will also be submitted for the creation of a European
deposit guarantee fund and a fund for the resolution of banking crises,
the commissioner said. To allow for greater integration, there will also
be proposals “rather quickly” to “to go further towards solidarity among
the guarantee funds.”

–Paris newsroom +331 4271 5540; e-mail: ssandelius@mni-news.com

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

Last day of the month, so we have to pay a little attention to month end portfolio rebalancing flows, deep joy.

Have gotten info from three banks, one US investment bank and two UK clearers, regarding likely flows in EUR/USD.

The two UK clearers expect minimal month end EUR/USD flows,  whilst the US investment bank is expecting strong negative flows, in fact very strong negative flows.

Something to bear in mind. Take it for what you will.

– See Separate Table For Details of Individual Forecasts

TOKYO (MNI) – Combined investment in equipment (including software)
by non-financial firms in Japan is expected to have risen 8.9% on year
in April-June, a third straight quarter of y/y increase after +3.3% in
Q1 and +7.6% in Q4 of 2011, according to the median forecast of
economists surveyed by MNI.

The Ministry of Finance will release the data as part of its
quarterly business survey at 0850 JST on Monday, Sept. 3 (2350 GMT
Sunday).

Q2 capex is expected to show a relatively high y/y rise in a
rebound from a sharp 7.8% drop seen a year before, when Japan was trying
to recover the March 11 disaster.

The Cabinet Office will release revised Q2 GDP data on Monday,
Sept. 10, after taking into account the demand side of capex and
private-sector inventory changes based on the MOF survey.

In the preliminary GDP data released on Aug. 13, the economy
expanded a real 0.3% q/q (annualized +1.4%) in Q2 while capex rose 1.5%
q/q (annualized +6.3%).

On a seasonally adjusted basis, Q2 capital spending (excluding
software) in the MOF data is forecast by economists to have risen 0.9%
from the previous quarter, posting the first gain in two quarters after
-1.7% in Q1 and +11.8% in Q4 of 2011.

skodama@marketnews.com
** MNI Tokyo Newsroom: 81-3-6860-4823 **

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

FRANKFURT (MNI) – European Central Bank Governing Council member
Jens Weidmann considered resigning from his post a number of times in
the last few weeks over the ECB’s planned bond-buying program, the
German daily Bild Zeitung reported Friday, citing sources in financial
circles.

Weidmann, who heads Germany’s Bundesbank, reportedly raised the
possibility within the Bundesbank board. He has since decided against
resignation, believing he can exert more influence from within the ECB
Governing Council.

The German government also lobbied for Weidmann to remain in his
post, Bild reported.

Weidmann has been a vocal critic of the ECB’s plans to restart its
sovereign bond buying program, arguing it comes too close to state
financing by the central bank.

CDU parliamentarian and budget expert Klaus-Peter Willsch had
warned Thursday that Weidmann could resign if he did not get the
necessary support from Germany.

A Bundesbank spokesperson Thursday signaled that Weidmann had no
intention of resigning, pointing to a recent interview in the German
magazine Der Spiegel.

“I can do justice to my job best when I remain in office. I want to
work to ensure that the euro will remain as hard as the mark,” Weidmann
said in the interview when asked whether he might resign.

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

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

“We have had low expectations for significant news,” said Vincent Reinhart, an economist at Morgan Stanley and a former top staffer at the Fed.

‘Former top staffer at the Fed,’  he should have a pretty good handle on things, shouldn’t he?

• Greece can’t be allowed to weaken reform agenda

-Aug House Prices Up 1.3% m/m; Down 0.7% y/y

LONDON (MNI) – House prices spiked in August, rising 1.3% on the
month and more than reversing July’s 0.8% fall.

The Nationwide data show only low levels of house price deflation,
with August prices down 0.7% on the year compared to down 2.6% in July.
These data support the view that while there have been high levels of
volatility month-by-month in the UK housing market this year, the
underlying picture is one of relatively stable prices.

The average UK house price stood at stg164,729 in August, up from
162,228 in January but below the 2012 peak of stg165,738 seen in June.

The weak July Nationwide data look like an outlier. The Halifax
series showed house prices down just 0.6% on the year in July on a
smoothed three monthly basis and now Nationwide is showing similarly
mild deflation.

“The fact that the annual pace of house price decline moderated to
-0.7% in August from -2.6% the previous month provides evidence that
conditions remain fairly stable,” Robert Gardner, Nationwide’s Chief
Economist, said.

Gardner added that the surprising resilience of the UK labour
market was one factor that may be underpinning prices, with employment
growing despite a flat economy.

Activity in the UK housing market, however, is still very low by
pre-financial crisis standards. Nationwide noted that, based on Bank of
England data, mortgage approvals averaged 107,700 a month in the
2005-2007 period. In July, mortgage approvals were just 47,312.

–London newsroom: 4420 7862 7491; e-mail: drobinson@marketnews.com

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

GERMANY DATA: Jul real sa retail sales -0.9% m/m, nsa -1.0% y/y
–Jul m/m retail sls below all fcsts (MNI median +0.3%)
–Jun m/m retail sales revised up to +0.5% (-0.1%)
–Jul retail sales -0.6% vs 2q avg, 2q +0.4% q/q
–Jul sales 3mma (may-jul:apr-jun) -0.1%, jun +0.1%
–See MNI Mainwire for details

UK DATA: Nationwide Aug House Prices Up 1.3% m/m; Down 0.7% y/y
————————————————————————
House prices spiked in August, posting their largest monthly rise since
January 2010. The mild price deflation exhibited, with prices
down 0.7% on the year, brings the Nationwide survey into line with the
Halifax one, which showed prices down 0.6% on the year in July.
Nationwide said there was evidence of stability in the UK housing
market.

Demonstrably stronger than Reuter’s median forecasts of flat m/m, -2.2% y/y.

Biggest month on month rise since January 2010.

Demonstrably weaker than Reuter’s median forecasts of +0.2% m/m, +0.4% y/y.

• Germany seeks strategic ties with ‘new centres of power’

Official speaking in Hong Kong.