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Aussie Jumps, Euro Lifts, Korea Cuts….

Friday, October 12, 2012 3:39 AM GMT

Good Morning ,


- Aussie Jumps, Euro Lifts, Korea Cuts….

- Australians get to work and the euro bounces back…The euro rose against the dollar for the first time in four days on Thursday, after the head of the International Monetary Fund said that indebted euro zone economies should have more time to cut budget deficits, overshadowing a downgrade of Spain's credit rating.

-Christine Lagarde, the International Monetary Fund managing director, said she favored giving debt-burdened Greece and Spain more time to reduce their budget deficits because cutting too far and too fast would do more harm than good.

-Lagarde's comments were seen supporting stability in the euro zone and reducing the risk of Greece exiting the 17-member bloc.

-"Better-than-expected economic data yesterday morning out of the United States, in particular much better-than-expected weekly jobless claims numbers, added to the overall improved mood throughout financial markets."

-Australia's latest jobs report beat expectations handily, and the Australian dollar jumped.

- Aussie, reversed earlier losses and climbed to its highest since Oct. 2 at $1.0294, after the country's employment rose more than expected.   

-The number of Americans filing new claims for unemployment benefits fell to 339,000 last week, the lowest since February 2008, according to government data, suggesting big improvement in the labor market.

- Eur/usd:The euro (0)rose 0.5 percent to $1.2930. It had fallen to $1.2824 earlier in Asian trade, the lowest since Oct. 1, after Standard & Poor's cut Spain's sovereign credit rating to BBB-minus, just above junk status, with a negative outlook.

-All high-yield currencies rose, not only due to Christine Lagarde supportive comments, but also because of the unexpectedly sharp fall in job claims for U.S. and the great jobs report from the Australia side.

- The euro also drew technical support after failing to break below its 200-day moving average around $1.2822.

-The Bank of Korea cut interest rates and sharply lowered its economic growth forecast, and the won slipped before ticking higher.

-UK's PM Cameron said UK's economic recovery is taking   longer than anticipated.

-The yen also weakened as speculation grew that the Bank of Japan may take action to curb yen strength. Japan's newly appointed finance minister, Koriki Jojima, said further yen gains would pose major downside risks to the Japanese economy.

-The dollar gained 0.2 percent to 78.31 yen andthe euro rallied 0.6 percent to 101.26 yen .

- Also, Japan's PM Noda said his government will act against any disorderly gains for the yen.

-  The FED Beige Book report note "widespread improvement" in housing which has helped increase economic activity since August. Manufacturing conditions were mixed but "somewhat improved" since the prior report.

- FED'S PLOSSER: Predicts 'steady improvement' in labor market, and sees 'gradual decline' in U.S. unemployment rate. 

- Fed's Bullard expects GDP growth exceeding 3% next year. He says U.S. housing 'doing somewhat better'.

-USD lost ground to almost all majors except JPY in yesterday's trading. CHF beating USD the most, up 0.522%.

-US 10-year bonds declined; yield rises 1.9bps to 1.69%.

-Also, Germany 10-year bonds extended decline; yield climbs 1.6bps to 1.51%.

-The Swedish crown fell to a three-month low against the euro after Swedish inflation data came in below economists' forecasts, supporting expectations a rate cut could be imminent. The euro was last up 0.5 percent at 8.6680.

-EURCHF:  Might build more and more clues that dynamics have changed, and that EUR/CHF is ranging above 1.20 with upside toward 1.22 or even higher.

-Greece's biggest company, Coca Cola Hellenic, is leaving the country, the drinks bottler said on Thursday as its move to Switzerland and a London listing for its shares dealt a blow to the crippled Greek economy.

-EADS and BAE have terminated merger negotiations after the UK, France and Germany failed to agree on how much influence they should have over the combined entity. London, Paris and Berlin blame each other for not backing the tie-up.

-IMF, World Bank urge China, Japan to overcome differences.


Have a nice day !

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