Sarkozy, Merkel Low on Substance, US Data Mixed

Euro rebounded right after the Sarkozy/Merkel conference as the leaders mentioned "integration" & "Unified" fiscal policy, which are always positive for the euro but they also hinted that a common eurozone bond was not part of their near-term plans. Euro had dropped towards 1.4350s after disappointing German GDP, but remained above the 1.4350 stop addressed in the Intermarket Insights (see more below). GBP regains 1.64 after July CPI came out at 4.4% y/y up from previous 4.2% and slightly higher than expected 4. The 3 Premium trades on GBP involved tactical trades on .

..tactical trades on EURGBP, GBPUSD & GBPJPY assuming higher than expected UK inflation figures. Shorts at $1.6440 were suggested at 23:20 GMT. Silver regains the 40 target, after an initial drop, which was anticipated in our Premium piece. Our shorts in US crude, AUDNZD and EURJPY hit their targets. US July housing starts slowed 1.5% to 604K from 629K while building permits fell by more than expected, down 3.2%. July industrial production jumped 0.9% from 0.2%, beating expectations of 0.5.

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Ashraf Laidi