- China Premier Wen: Talks with US in May will be very important; can find solutions if work as equals – rhetoric cools…
- Fed’s Bullard: Jobs data about to turn a corner
- Greek Deputy PM: Germany allowing banks to speculate against Greece; it wants lower euro to improve exports
- Eurogroup’s Juncker: Eurogroup will not abandon Greece; against IMF taking lead role; hopes for framework in coming days.
- Merkel: Greece should not be on EU summit agenda, has not asked for aid; Aid only when at the brink of bankruptcy
- Trichet: Aid only if grave and immediate dangers; high spreads not enough.
- US equities rise 0.5% to 1166.
- Oil reverses large intraday losses, ends up 0.57 at $81.25
- US 2-year notes edge up 0.1% to 0.96, 10-year notes fall 0.03 to 3.66%
EUR/USD dove to 1.3463 as Greek deputy PM Panaglos made incendiary remarks aimed at Germany, accusing Merkel of allowing German banks to speculate against Greece and welcoming the resulting euro weakness as a boon for German exports. Prices did not spend long near the lows as traders were well aware that the three prior drops below the 1.3500 level were also short-lived. Four trips below 1.35 and not one close below that level yet. We tripped stops above 1.3550 and reached 1.3569 before stalling.
Pressure grows on Merkel to get in line with the rest of the EU in seeking a fall-back for Greece if rates don’t fall.
GBP/USD was a big mover today, recovering overnight losses to 1.4934, reaching 1.5100 late in the day. EUR/GBP selling was the culprit for the EUR bid as EUR/USD fell and a stable cross at the lows allowed cable to rebound against the dollar. Position adjustment rather than fundamentals looked to have been the catalyst. Central banks continue to liberally add to long GBP/USD positions below 1.500, it should be noted.
USD/JPY slid to 89.84 as EUR/JPY was slammed in early US trade. It bounced right back as EUR/USD recouped lost ground, rising to 90.20 in the afternoon. Rumors of Japanese “semi-0fficial” (Kampo) buying were heard again below 90.00. AUD/USD dipped below 0.9100 with the euro but ends the day a cent above the lows at 0.9180. A turnaround in commodity prices and lessening risk aversion helped boost the AUD.
