LONDON, Dec 8 (MNI) - Corrective easing extended below $1.3200 in early European dealing Wednesday before meeting decent dollar supply from macro accounts that was able to correct rate back toward $1.3250 in late morning business.
Release of stronger-than-expected German industrial production data had only minimal effect, any react buying well suplied by profit take sales. US yields and eurozone peripheral debt developments continue to be the main drivers.
EURO SUMMARY: Opened in early Europe around $1.3216
$1.3257, seen as rate was pressured lower on general dollar demand linked to rising UST yields. Stops below $1.3250 were targeted and triggered in early Asia, the rate trading to an early low of $1.3236 before meeting Asian sovereign demand. Rate recovered to $1.3280, met Scandinavian sell interest before reversing. Easing gained momentum as short term momentum funds sold, with rate squeezing to $1.3221 on reaction to news reports of North Korean artillery heard. Danish demand provided support, the rate recovering to $1.3230/35 before easing again into Europe. Further sales into early Europe extended move to $1.3191 where it met demand ahead of $1.3190. Rate recovered to $1.3230 again before getting pressured back to $1.3180 on a mix of cross-led sales. However, move met willing dollar sellers that helped recovery, edging toward $1.3250 ahead of German data, with little react to release of strong numbers.
EUROZONE: Reported comments from eurozone officials Wednesday, * ECB LIIKANEN: Must be 'suitably ambitious' in economic governance - Repeats full allotment on ECB operations through Q1 at least - Public deficit not adequate measure of economic fitness - Central banks should play role to curb excessive lending - Bank of Finland: Crisis shows risks of excess asset price rises - Bank of Finland: debt, weak competitiveness have sapped mkt confidence - Bank of Finland: low inflation have made accommodative monpol possible * EU JUNCKER: Germany rejected eurobond idea without studying it - German government has un-European manner - Germany's thinking on eurobonds is simplistic. * GERMAN SCHATZ AUCTION RESULTS: Germany alloted E4.005bln of 1.00% Dec 2012 Schatz issue Wednesday at average yield 0.92%, bid-to-cover 1.1 times -- uncovered again! * GERMANY: German debt agency spokesman tells MNI: - Acknowledges 3rd failed auction in December for Germany - Blames nervous market conditions and high volatility for auction fail - Failed auction not a problem for financing debt & austerity in Germany.
EUROZONE: Releases in the eurozone Wednesday, * BANK OF FRANCE SURVEY: France 4Q GDP seen up 0.6% q/q (+0.5%) - France Nov industry climate 107 vs Oct 104 (103) - France industry gained momentum overall - Nov manufacturing capacity utilization 78.2% vs oct 76.9% - Industry output seen rising in coming months - Industry order books up sharply; higher than normal - Finished goods inventories at targeted levels - France Nov services climate 98 vs Oct 96 (96) - Services stronger across board, especially temporary work - Services prices stable, staffing up significantly - Services activity seen on trend of ongoing growth
EUROZONE: Press pick-ups in the eurozone, * IRELAND: Most Irish workers face substantial tax increases, while social welfare recipients will have their benefits cut as part of the 6-billion adjustment announced in the Budget yesterday by Minister for Finance Brian Lenihan, the Irish Times says. The wide-ranging tax changes in the Budget will bring some lower-paid workers into the tax net for the first time and will hit every income group up to the top earners, the paper says. The Budget passed its first test in the Dail last night, with the Government having a comfortable majority of 82 votes to 77 on the first vote on the measure, the paper adds. * ITALY: Italy's politicians have started scrambling for votes ahead of a parliamentary session next week that could bring an early end to Silvio Berlusconi's centre-right coalition even as his allies insist that the government has enough support to survive, the FT reports. On paper, however, Berlusconi can no longer rely on a majority in the lower house in the votes on December 14 following the defection of more than 30 deputies who have joined Gianfranco Fini, a former ally, in their breakaway Future and Liberty party, the paper adds.
EUROZONE: Data released in the eurozone Wednesday, * GERMANY: Industrial production in Germany rebounded by a stronger-than-expected 2.9% on the month in October, boosting output 2.7% over the previous quarter and resulting in the annual change widening to +11.7%, the Economics Ministry reported on Wednesday. * GERMANY: Germany's seasonally and calendar-adjusted trade surplus fell more than generally expected to E14.2 billion on the month in October, the Federal Statistical Office reported on Wednesday. * FRANCE: October sa merchandise trade deficit E3.431 bln after -E4.378 bln in September (revised from -E4.683 bln) - Trade balance above MNI analysts survey median forecast of -E4.4 bln * FRANCE: Jan-Oct central government deficit E133.1 bln,-E1.5 bln y/y - Jan-Oct government outlays +16.9% y/y; revenues +20.1% y/y
YEN SUMMARY: Asia open Y83.49/Y110.72 trading Y83.46-84.02 and Y110.52-
following the Tax cut agreement between Pres. Obama and the Senate. Reports of further rumblings in the Korean Peninsula added to the cause. Dollar-yen rallied through stops at Y83.55 to Y83.66 in NY before closing at Y83.49. Asia saw a further push through 100 dma at Y83.77 but ran into exporter offers and profit-taking towards Y84.00. Dollar peaked in Europe at Y84.06 but has held up well in Y83.90's with strong demand from UK clearers, Middle East names. Resistance is seen at Y84.10. Y84.40 with stops through Y84.50. Euro-yen rallied to Y111.11 in NY but closed down at Y110.72. Asian picked up to Y111.07 before dipping to Y110.60 but cross remains in demand looking to break resistance at Y111.10 for a chance of Y111.90/95. Sterling-yen put on another small surge in Asia having rallied to Y131.80 in NY, with a rise to Y131.97, and ground higher to Y132.25 in Europe this morning.
JAPAN: Reported comments from Japanese officials Wednesday, * ECONMIN KAIEDA: : Reported comments from econ minister Kaieda (Rtrs) - Government needs to take steps if yen rises excessively. - FX moves are basically decided by markets. - Confident government will compile next fiscal year budget by Christmas. - Wants full-fledged debate on sales tax next year. - Incremental sales tax hikes are one viable method.
JAPAN: Data released in Japan Wednesday, * The Economy Watchers' Survey index for current conditions in Japan jumped to 43.6 in November from 40.2 in October, posting the first rise in four months, thanks to rush purchases of consumer electronics and higher demand for winter clothing in colder temperatures, the Cabinet Office says today. The government repeated its assessment of the sentiment from last month, saying that the latest survey showed that "the economy has been picking up at a moderate pace but it is now showing soft spots." * Nov corporate bankruptcies -6.27% y/y at 1061 cases - Nov corp bankruptcy debt -60.59% on yr at Y273.83 bn - Nov corp bankruptcies -6.6% on month, debt down 47.34% on month * Japan Nov Bank Lending -2.1% Y/Y, 12th Drop In Row - Japan Nov M2 Money Stock ++2.6% Y/Y Vs Oct Revised +2.8% - Japan Nov M3 Money Stock +2.0% Y/Y Vs Oct Revised +2.1% * Japan Oct Current Account Surplus +2.9% Y/Y at Y1.436 Trln - Japan Current Account Surplus Posts 2nd Y/Y Rise In Row * Japan Oct Machinery Orders -1.4% M/M Vs Sep -10.3% - Japan Oct Machine Orders MNI Survey Median Forecast: -0.2% - Japan Oct Machinery Orders Post 2nd M/M Drop In Row - Japan Govt Repeats View: Machine Orders Picking Up - Japan Oct Core Machine Orders Ex-Handsets +0.6%; Sep -14.2% - Japan Oct Core Machinery Orders +7.0% Y/Y Vs Sep +4.2% - Japan Oct Core Machinery Orders Post 4th Y/Y Rise In Row
