- Swiss National Bank expands measures against strong swiss franc
- South Korea returns fire after North Korea artillery attack
- ECB buys Italian and Spanish bonds again
- BOE inflation report (read it here, if you must)
- Bank of England cuts growth outlook, lowers CPI forecast
- Sarkozy: France will meet its’ deficit targets however the economic situation evolves
- BOJ’s Shirakawa: Will take appropriate steps on policy
- Japan govt raises economic assessment for August
- German July CPI (final) +0.4% m./m, +2.4% y/y, as prelim and as expected
- French June industrial output -1.6% m/m, much weaker than median forecast of -0.6%
- Bail-outs chip away at France and Germany too – AEP at The Telegraph
Hectic morning once again, but when all said and done there’s not alot of net change in the major spots and crosses. If you trade swissy you’ll be in need of a lay down in a quiet darkened room right about now. The EUR/CHF cross has traded a scary 1.0283-1.0523 range.
The cross action went something like this. Went up early amid mutterings of SNB intervention (never confirmed) Then it crapped out as reports came in that North Korea had taken pot shots at South Korean island. No sooner had we slumped to session low than we hurtled back to session high as news came in that the SNB had expanded measures against the strong franc. We then drifted lower as the market questioned whether the SNB measures are going to be enough. Happy Dayz.
EUR/USD up marginally at 1.4360 from early 1.4345 having been as high as 1.4401. BIS stepped in buying around 1.4350 which lent support. Sell orders well-documented lined up at 1.4400/20, so it came as no great surprise when we topped out just above 1.4400.
USD/JPY down at 76.50 from early 76.95 having been as low as 76.40, the BOJ still staying away. The news from the Korean peninsula didn’t help the Japanese authorities’ cause, the yen as usual strengthening on bad news from that theatre.
Cable sits at 1.6260, very marginally easier from early 1.6275. We drifted lower early as the market anticipated a dovish tone to the latest Bank of England inflation report. The anticipation was right on the money and we fell fleetingly below 1.6200 (1.6190 session low) before rebounding strongly.
An Asian central bank is reported to have bought decent amounts around the lows, helping accelerate a bout of short covering. At the end of the day what did the inflation report/accompanying King comments tell us that we didn’t already know?