- Ifo German business climate index 102.4, better than Reuter’s median forecast of 102.0
- Bank of England minutes: MPC voted 8-1 to keep QE total at £375 bln. Miles voted for extra £25 bln
- Fitch: Increased likelihood U.S. would lose AAA status if failed to avoid fiscal cliff, went into recession
- Dutch govt agency CPB: Expects economic recovery to begin in second half of 2013
- Japan PM elect Abe: Monetary policy alone can’t correct yen strength. Nor can monetary policy alone beat deflation
- ECB’s Asmussen: Would be very reluctant to cut deposit rate below zero
- ECB’s Praet: Threats of euro exits from countries has vanished
- Saxo Bank’s outrageous predictions 2013: Extreme complacency
- UK CBI December retail sales balance falls to +19 from +33 in November, tad below Reuter’s median forecast of +20
Optimism a plunge over the U.S. fiscal cliff can be averted, and anticipation of aggressive monetary ease by Japan’s BOJ as early as tomorrow, are combining to help lift stocks.
Eurostoxx 50 up a respectable +0.6% this morning, Spain’s IBEX indice best-performing up a healthy +1.3%.
Against this backdrop EUR/USD up at 1.3278 from early 1.3245 having been as high as 1.3283 after buy stops tripped through 1.3260. Talk sell orders clustered from 1.3280 up to touted 1.3300 barrier option interest.
USD/JPY remains firm in anticipation of BOJ monetary ease tomorrow. USD/JPY up at 84.50 from early 84.30.
Cable up at 1.6295 from early 1.6260 having been as high as 1.6306, taking out rumoured barrier option interest at 1.6275 and 1.6300 along the way. Next topside hurdle for the cable bulls is 1.6310, the 2012 high so far.
