So that explains why GBP/USD’s underlyingly bid then ……..

Down through 1.2330 i’m told, but they’re mixed in with bids down to 1.2300.

We’re around 1.2335 now after a recent low of 1.2331

-Jun Global Goods Trade Deficit Stg10.119bn vs Stg8.364bn May
-Jun Total Trade Deficit Stg4.308bn vs Stg2.718bn May

LONDON (MNI) – The UK’s trade deficit in goods and services
hit a record high in June as the loss of two working days caused a sharp
contraction in exports, figures released by National Statistics
Thursday.

While the June data will have been hit hard by special factors, the
trade shortfall for Q2 also hit a record suggesting the renewed stresses
in the Eurozone are having a negative impact.

The goods and services trade deficit widened to Stg4.308 billion in
June from Stg2.718 billion in May, significantly wider than the median
forecast of Stg2.9 billion.

The goods trade shortfall rose to Stg10.119 billion in June from
Stg8.364 billion in May, also above the forecast for a Stg9 billion
deficit. The value of exports plunged 8.4% on the month while imports
were down 1.2%.

The June data will have been affected by the loss of two working
days due to the Queen’s Jubilee, although National Statistics said they
were unable to quantify the impact. Other economic data, including the
industrial production, were seemingly hit hard by the Jubileee as
factories remain closed.

Exports to both EU and non-EU countries were affected in broadly
equal measure. EU exports fell 7.2% on the month while imports were down
2.6%. Exports to non-EU countries declined 9.6% and imports were up
0.2%.

National Statistics said that two of the largest hits came from
lower exports of cars and chemicals.

Part of the deterioration in June was also due to a massive 24.5%
plunge in oil exports, with the oil deficit rising to Stg1.549 billion
from Stg0.938 billion in May. Stripping out both oil and erratic items
the goods trade deficit widened less dramatically to Stg8.467 billion
from Stg7.136 billion. On this basis, exports were only down 5.4% on the
month.

The quarterly data also show a marked deterioration in the UK’s
trade position. The trade in goods deficit widened to Stg28.292 billion
in Q2 from Stg25.047 billion in Q1, the widest on record. While this
will have still been affected by one lost working day on the month,
there is clearly a more general downturn in the UK’s trade position.

In the August Inflation Report, the Bank of England said that the
“apparent weakening in growth in Q2 appears to reflect a more widespread
softening in export demand from across the euro area, a pattern
consistent with reports from the Banks Agents.”

-London newsroom: 44 20 7862 7491; email: puglow@marketnews.com

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

Much worse than forecast of -£8.63 bln after a May revision of -£8.364, and the largest deficit since Sept last year.

Cable’s slipped a few pips to day’s lows of 1.5649

Not surprising after a sharp fall in exports which the government was hoping to lead Britain’s recovery

Haven’t heard anything specific but there was some downward pressure into the 0800GMT fix which appears to be ongoing, with EUR/GBP also taking  a dive  and filling the earlier mentioned bids down at 0.7880/85..

EUR’s around 1.2340 with the cross at 0.7880

A few views on the slew of Chinese data earlier….

More.. FT alphaville

• Sees Eurozone 2012 HICP inflation of 2.3 % (unchanged from Q2)
• 2013 HICP at 1.7% (from 1.8% in Q2), and 1.9% in 2014
• Eurozone long term inflation expectations  at 2% (unchanged from Q2)
• 2012 growth seen -0.3% (from -0.2% in Q2), 2013 at +0.6% (from 1.0%) and 1.4% in 2014

Q3 survey of professional forecasters see uncertainty surrounding longer-term inflation expectations somewhat declining but remaining high.

After a Eur 1.704 bln deficit in  in June 2011

 EU trade surplus in June Eur 997 mln from deficit of 316 mln in June 2011

• Must be mindful of the impact of financial transactions when considering LIBOR alternative
• BOJ buying foreign bonds  would be the same as FX intervention, which is under the government’s jurisdiction
• Low long-term yields reflect confidence in Japan’s fiscal reforms
• Don’t see the need now to scrap 0.1% min interest for JGB buying via asset buying programme at the moment , but will scrutinise market and auction results to decide.
• Exports a gradual pick up in exports as global growth emerges from slowdown
• Decline in yields could reverse if progress in solving Europe’s crisis slows

No wonder the history's being used to attack the modern Bundesbank's resistance to bond-buying, or even eventual quantitative easing, by the ECB in 2012.

interesting read…… FT alphaville

Seeing some early gains this morning in equities with  the CAC40 and IBEX up around 0.7%, DAX up 0.3%, STOXX 0.4% and Italy’s FTSE MIB up around 0.5%

– See Separate Tables for Details

TOKYO (MNI) – Economists have revised up their GDP forecasts but
revised down their CPI projections for both fiscal 2012 and 2013 in
light of falling energy and commodity prices, the latest monthly survey
by the Japan Center for Economic Research released on Thursday showed.

The organization polled 40 economists and research institutes from
July 26 to Aug. 2 for its ESP Forecast Survey, and 40 answered on the
growth and inflation outlook and 38 on the BOJ’s monetary policy stance.

The previous survey was conducted from June 26 to July 3.

In the near term, economists expect GDP for the April-June quarter
of 2012 (data due out on Monday) to post an annualized gain of a real
2.21%, an upward revision from their previous average forecast for a
1.87% rise.

But amid global economic and financial uncertainties, the average
GDP forecast for the July-September quarter was also revised down
further to +1.25% from +1.52% in the previous survey.

As for fiscal 2012 ending March 31, 2013, economists on average
forecast GDP will grow 2.34%, revised up slightly from +2.32% forecast
in the previous survey.

Economists on average project a 1.64% rise in GDP in fiscal 2013,
revised up from +1.59% projected the previous month.

The survey showed that the average forecast for core CPI (excluding
perishables) in fiscal 2012 was for only +0.01%, down further from
+0.06% in the previous survey. It would still be the first annual
increase in four years since +1.2% in fiscal 2008.

Economists on average expect consumer prices to show a 0.18% rise
in fiscal 2013, down from +0.20% predicted the previous month.

The forecasts showed that consumer price rises for the next two
years will remain far below the Bank of Japan’s longer-term goal of
achieving 1% annual inflation.

The survey also showed that 27 economists predict further monetary
easing by the Bank of Japan in coming months, mostly in September or
October, up from 25 last month.

Meanwhile, 11 economists expect the BOJ to start unwinding its
monetary easing, mostly in about a year ahead, unchanged from the
previous survey.

tokyo@marketnews.com
** MNI Tokyo Newsroom: 81-3-5403-4833 **

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

Still holding up well despite slightly weaker Chinese  retails sales and IP data and along with a soggy EUR/AUD looks ripe for a move back up through 1.0600 again to test the barrier at 1.0650. Only thing lacking just now is momentum, especially with the EUR/USD seemingly magnetised to the 100 hour MA around 1.2376.

There’s the usual mumbles about RBA commercial selling interest above the 1.0600 handle, but i’ve yet to hear of any actual evidence of this, although there are offers in the 1.0630/50 bracket from various names including some funds. Bids run from 1.0550 down to 1.0500, but expect some solid support in between around 1.0530 (yesterday’s low)

AUD’s currently around 1.0596

JAPAN DATA: The Japan Machine Tool Builders Association releases
preliminary July data:
– Machine tools orders Y105.69 billion, -6.8% y/y vs. -15.5% in
June
– Domestic orders, a leading indicator of core machinery orders
(July data due Sept. 12), -8.4% y/y vs. -16.5% in June
– Orders from overseas, which account for about 70% of overall
orders, -6.0% y/y vs. -15.0% in June

EUR/USD:  Bids layered from 1.2350 down to 1.2300, (tech lvl 1.2327 yesterday's lows) sell stops below 1.2300. Offers 1.2400/10 and layered up to 1.2450 buy stops above on a break of the 1.2450 barrier.  More offers ahead of another barrier at 1.2500 (supposedly part of a 1.20-1.25 DNT)

GBP/USD:   Offers seen strong up at 1.5685/00 (1.5685 Aug 7/8 high) possible buy stops just above but more offers 1.5720/30.  Bids 1.5635/45 and 1.5590/5610 some sell stops down through 1.5580

EUR/GBP: Strong offers 0.7925/30 and tech res 0.7967 (55 day MA) stronger again up at 0.7990/00. Bids 0.7880/85, sell stops just below.

USD/JPY:  Bids 78.35/50 and 78.00/10 (Kampo, importers, Japanese lifers), large sell stops through 78.00 and 77.50. (Barriers noted at 77.75 and 77.50). Offers 78.50/70 from exporters some buy stops mixed in through 78.70 and 78.85 with offers up to 79.00. Buy stops above just ahead of tech res at 55/200 day MA's at 79.07 /17

EUR/JPY: Bids 96.90/00, 96.60/70, and tech supp 96.35/40 (96.36 Tenkan line). Offers 97.30/40, stronger up at 97.75/85 ahead of tech res 98.10/15 (98.13- 55 day MA)

AUD/JPY:  Bids 82.75/85 and 82.50/60 (Japanese names) sell stops below. Offers 83.20/30 likely buy stops just above

EUR/CHF: Bids 1.2000/10(SNB), Offers 1.2025/30

USD/CHF: Bids 0.9700/10, tech supp 0.9660/70. Offers 0.9740/50

AUD/USD:  Offers 1.0605/15, buy stops through 1.0620 ahead of  larger offers from 1.0630 up to a 1.0650 barrier. Bids 1.0550/60 some sell stops below ahead of more bids 1.0500/10.

EUR/AUD:  Offers 1.1715/25 and 1.1760. Bids/tech supp 1.1665/70, stronger down at 1.1605/10 (recent lows)

NZD/USD:  Offers from 0.8155/65. Bids 0.8100/10 and 0.8070/75

– Japan July Consumer Confidence Index 39.7 Vs Jun 40.4
– Japan Consumer Confidence Index Posts 2nd M/M Fall in Row
– Japan Govt Downgrades View: Confidence Is Weakening

TOKYO (MNI) – Japan’s Consumer Confidence Survey index fell to a
seven-month low in July as more people believed job security and income
growth would worsen in the coming six months amid fading effects of
fiscal programs on car sales and home building, data released by the
Cabinet Office showed on Thursday.

The closely watched index slipped to 39.7 in July from 40.4 in
June, hitting the lowest level since last December, when the index was
at 38.8.

It has drifted down from 40.7 in May, the best reading since
February 2011, when it stood at 41.2 before the March earthquake
disaster triggered a plunge in the index.

The Cabinet Office downgraded its assessment, saying, “consumer
confidence is weakening.”

In the previous month’s report, it said that “consumer confidence
turned largely flat.”

In July, all four sub-indexes — measuring overall economic
well-being, labor conditions, income growth and the timing for buying
durable goods — fell from the previous month.

The latest survey was conducted on July 15, covering 6,720
households, of which 5,032 responded.

In July, the labor conditions sub-index fell 1.2 points to 36.8
while the sub-index on income growth lost 0.3 point to 39.4.

Meanwhile, the latest survey indicated that consumer inflation
expectations were flat.

The percentage of people forecasting higher prices in a year’s time
stood at 60.6% of the total on an unadjusted basis in July, down from
61.3% in the previous month, while the percentage of people expecting
lower prices was 7.4% last month, also down from 7.7% previously.

By contrast, the percentage of people foreseeing no change in
prices rose to 24.9% in July from 23.2% in June, up for the third
straight month.

An annual inflation rate below 2% was forecast by 22.6% of those
surveyed in the latest month, down from 23.0% in the previous month.

Inflation in a range of 2% to 5% was forecast by 24.8% of the total
in the latest month versus 25.6% in the previous month.

Inflation at 5% or over was forecast by 13.2% of the total in the
latest month, up from 12.7% in the previous month.

Price drops of less than 2% were seen by 4.1% of the polled in the
latest month, down from 4.3% in the previous month.

Price drops in a range of 2% to 5% were forecast by 2.0% of those
surveyed in the latest month, down from 2.2% in the previous month.

The annual rate of price drops at 5% or over was foreseen by 1.3%
of the total in the latest month, up from 1.2% in the previous month.

tokyo@marketnews.com
** MNI Tokyo Newsroom: 81-3-5403-4835 **

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

Below expectations of 13.7%y/y

July industrial output  down to 9.2% y/y (expected +9.8%), showing further slowing down from the 14/15% seen last year.

AUD/USD’s pulling back from recent highs around 1.0603 on the slightly weaker release but remains on a firm footing

Golly this is becoming a long week with the EUR/USD sitting again around 1.2380 as Europe prepares to open. there’s not a heck of a lot on the data front to inspire either, just to rub salt into the wounds.

EUR/USD offers are stacking up in the 1.2400/10 area (1.2410-55 day MA) with the 1.2450 barrier still intact behind, but the going is expected to be heavy again with offers layered up to the level from supranationals and SNB related banks. Buy stops sit just above but further offers lie in wait up to 1.2500 which also holds a barrier.

On the downside  1.2374 (100 hour MA) seems to be adding some support and there are bids down to 1.2350 with a  few sell stops just below, but a cluster of further bids also lie down to 1.2325/30(yesterday’s lows)  and 1.2300

From 40.4 in June

Nothing good here as consumer pessimism builds

The European Central Bank is now taking risky measures to help save Athens from its acute financial emergency. Increasingly, euro-zone leaders are pushing the dirty work on the ECB. In the end, though, they will likely have no choice but to pay Greece the next tranche of its bailout package.

Spiegel online