News that the ECB spent an unprecedented amount buying the bonds of troubled European nations dominated trading yesterday. The figures revealed they intervened to the accord of 22bn, with the market was looking for a figure somewhere nearer the 15bn mark.

The bond buying program had been on halt for some time and wasn’t enacted until they gained assurance that Spain and Italy would put through more fiscally responsible legislation. Euro was on the bid as a result of the news as the market viewed the swift, deep and proactive nature of their actions as positive. Clearly, buying government bonds to as this rate and pace cannot be continued for a sustained period of time, to give an idea of where the 22bn sits within the ECB balance sheet, the total amount of bonds they have is now still 96bn.

EUR/USD moved sharply higher in afternoon trading as a result, bouncing of 1.45 and moving GBP/EUR back into the lows 1.13’s.

The RBA again held rates overnight in their meeting, citing acute global issues as their main motives. AUD/USD traded fairly sharply as the RBA discussed the inflation outlook, however ultimately the pair resumed largely normal trading.

Europe once again remains the focus of the day, with the Sarkozy/Merkel press conference due at 5pm London time. We also have Q2 GDP data at 10am, a rise of 0.3% expected out.

The UK has all important inflation figures out shortly at 9:30, with RPI and CPI expected at 5% and 4.3% respectively

Latest exchange rates at time of writing