Heading into the North American open, equities in Europe are trading close to their best levels of the session, after the G7 this morning made no explicit objections to aggressive JPY depreciation that took place this year. In addition to that, SNB's Jordan also defended actions by the BoJ and said that global central banks aren't in currency war, while US Treasury's Brainard said that the US supports Japan's efforts to reinvigorate growth and end deflation. As a result, USD/JPY traded at its highest level since May 2010, however gains this morning have been capped by a barrier at 94.50.
Financials are seen as the best performing sector, with Barclays up just over 4%, after the company said it will cut 3,700 jobs as it continues to streamline its operations. The bank also reported a GBP 246mln pre-tax profit for 2012, down from GBP 5.88bln a year earlier, after absorbing GBP 4.58bln credit accounting charge related to its debt.
This morning, the ONS said that inflation in the UK has remained unchanged for the fourth month in a row at 2.7%. The official body also noted that price rises for alcoholic drinks in the post-Christmas period kept inflation high, while the drop in air fares that occurred during December was also reversed. The release comes a day ahead of the BoE’s latest Quarterly Inflation Report, where it is widely expected that growth projections will be trimmed yet again.
Going forward, market participants will get to digest the release of the latest JOLTS jobs opening, monthly budget statement and the weekly API report. Also, the US Treasury will sell USD 32bln in 3y notes.
Print 11:43, 12 Feb 2013 - Market Analysis - Source: RANsquawk
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