European FX Midday recap

14:20CET

These are the items that have hit the wires so far in European trading and that have caused some real market action:

    * Swiss National Bank leaves rates unchanged, as expected.  If a deflation threat emerges, the SNB would take the measures necessary to ensure price stability
    * Eurogroup’s Juncker:  There is no alternative to consolidating public finances in euro zone
    * EU’s Reynder:  Confident EU summit will produce decision on very strong stability mechanism
    * Japan Strategy Minister:  Govt to decide 2011/2012 budget on December 24 (working on Christmas Eve, that sucks)
    * BOE MPC Posen:  Policy should not overact to above target inflation (standard fare from the dovish Mr Posen)
    * UK  November retail sales +0.3% m/m, +1.5% y/y vs median forecasts of +0.4%, +0.7%  respectively
    * Irish Q3 GDP +0.5% q/q, -0.5% y/y, weaker than median forecasts +0.8%, flat repectively

Probably main feature has been some swissy weakness, but it’s not huge.  USD/CHF up at .9705 from early .9660,  EUR/CHF at 1.2860 from around 1.2780. I don't like the CHF as a strong currency for the time being, but let's not be aggressive in this time of the year.

EUR/USD up marginally at 1.3245 from early 1.3220, having reached session high 1.3265 at one stage.

Asian sovereign buying lifted pairing early.  We spiked fleetingly to session high in wake of Spanish auction results.  Major wire service threw a whoopsie, putting out an incorrect bid to cover ratio on the 10 year bond result. They had 2.67, should have been 1.67.

We drifted back from the spike, but US investment bank buying (you know who) in the 1.3215/20 area has lent support.

USD/JPY down very marginally at 84.05 from early 84.25.  Last time I looked US yields were very marginally easier on the day.  Not that I check them too much.

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