Week of November 13, 2011 thru November 19, 2011

Ldn FX: Sterling Firm On Strong Corporate Demand


LONDON, Nov 18 (MNI) - Sterling traded with a generally firm tone at the close of European morning trade Friday, with corporate demand noted providing the main upside drive.

Cable extended its recent recovery off Thursday lows at $1.5692 to $1.5864, while euro-sterling was pressing toward Nov 16 lows at stg0.8519. Moves seen mainly a correction of the week's downside pressure, with traders adjusting positions into the weekend.

STERLING SUMMARY: Opened early Europe at $1.5761 stg0.8550

-- Cable closed in NY at $1.5760, having been pulled back from session

highs of $1.5813 as Wall Street spiked lower into its close.

Canada October CPI +0.2% NSA; +2.9% Yr/Yr


--Core October CPI +0.3% NSA; +2.1% Yr/Yr
--Seasonally adjusted all items October CPI +0.3% vs September +0.4%
--Seasonally adjusted core October CPI +0.2% vs September +0.3%

By Courtney Tower

OTTAWA (MNI) - Canadian inflation eased back in October to 2.9% at an annual rate from 3.2% in September, to fall within the Bank of Canada's inflation control target range of 1%-3%, Statistics Canada reported Friday.

The core rate of inflation, which the Bank monitors in judging its key interest rate, also declined slightly, from 2.2% to 2.1%.

Euro Credit: Santander Consumer Bank Joins European Pipeline


LONDON, Nov 18 (MNI) - The new issues market has seen very little activity today, as Friday's session remains fairly muted with traders remaining on the sidelines, awaiting some stability in the peripheral bond markets.

Euro CDS: Credit Markets Unchanged Across Europe


LONDON, Nov 18 (MNI) - European CDS indices have now pared back their earlier losses are trading at unchanged levels.

ECB Weidmann:No Comment On Report Of Weekly E20 Bln SMP Limit


FRANKFURT (MNI) - European Central Bank Governing Council member Jens Weidmann Friday declined to comment on reports that the ECB has secretly imposed a weekly limit on its government bond buy program.

The Bundesbank President said he would neither confirm nor deny media reports that the central bank had set itself a weekly limit of about E20 billion for its Securities Market Program.

--Frankfurt newsroom +49 69 72 01 42; e-mail: jtreeck@marketnews.com

[TOPICS: MT$$$$,M$$EC$,M$X$$$,M$$CR$,MGX$$$]

Update: Bini Smagi: Cutting Debt Can Harm Growth; Must Do It


--Adds Comments On Italy's Weak Growth, Vulnerable Pension System

FLORENCE, Italy (MNI) - Policies to reduce debt can have a dampening impact on economic growth, but doing nothing is worse because that can further undermine confidence, European Central Bank Executive Board member Lorenzo Bini Smaghi said here Friday.

"Debt reduction policies can sometimes have negative effects on growth," Bini Smaghi acknowledged, referring to current policy efforts being contemplated in his native Italy by the new caretaker government of Mario Monti.

ECB's Makuch:Ready To Act On Mon Pol,Other Measures If Needed


FRANKFURT (MNI) - The European Central Banks stands ready to act both on monetary policy and non-standard measures if necessary, ECB Governing Council member Jozef Makuch told Market News International on Friday.

Ldn FX: ECB Italian Bond Buying Boosts Euro-Dollar Recovery


LONDON, Nov 18 (MNI) - Another round of reported aggressive European Central Bank Italian bond buying, the via securities markets programme (SMP), provided the recovery kick for euro-dollar.

The rate was able to extend its correction off overnight Asian lows before making a show above the Thursday's New York high of $1.3540. It was holding off its best levels ahead of the New York open with euro cross sales providing some counterweight.

EURO SUMMARY: Opened early Europe at $1.3476

-- Euro-dollar closed in NY at $1.3455 after being sold off late in the

session from highs of $1.3540 as Wall Street closed with a sharp pullback. The rate initially pressed lower in Asian trade, marking lows at $1.3447 before recovering.

ECB Bini Smagi: Cutting Debt Can Harm Growth, But Must Do It


FLORENCE, Italy (MNI) - Policies to reduce debt can have a dampening impact on economic growth, but doing nothing is worse because that can further undermine confidence, European Central Bank Executive Board member Lorenzo Bini Smaghi said here Friday.

"Debt reduction policies can sometimes have negative effects on growth," Bini Smaghi acknowledged, referring to current policy efforts being contemplated in his native Italy by the new caretaker government of Mario Monti.

Analysis: BOE Weale Endorses View QE Has A Speed Limit


LONDON (MNI), Nov 18 - Bank of England Monetary Policy Committee member Martin Weale has endorsed the view, pushed hard by some analysts and strategists, that quantitative easing has a speed limit.

The BOE's version of QE relies on it making large scale gilt purchases. Some analysts have speculated the MPC will step up the pace of QE sharply, while others have said it couldn't even if wanted to - as it would run into a shortage of gilt sellers and end up paying market distorting prices.

In an interview with the Financial Times, Weale clearly backs the view that there would be practical problems accelerating QE.