London Session - November 11, 2009 6:11 AM

The risk trade was boosted overnight by a decent set of data from China. Retail sales, production data and the trade surplus all beat market forecasts and strengthened the belief that China continues to drive the global economic recovery. Banking lending in China while strong expanded at a slower pace underpinning forecasts that this may be tightened to ward off inflationary pressures. Japanese machine orders (+10.5% m/m in Sep) also outshone market forecasts as did this morning’s release of UK labour data. The fly in the ointment was the drop in Australian consumer confidence which fell back in Nov, probably in response to this quarter’s two rate rises from the RBA. The better tone in Asian stocks was followed by an upward push in European equity indices which found further support in a spate of solid bank earnings from France, Italy and the Netherlands. EUR/USD pushed back above 1.5000 in early London hours to touch an intraday high of USD1.5045 providing support for the view that as long as risk appetite holds and expectations for Fed rates remain distant, the USD will remain the whipping boy Full text »