AUTOREFRESH 
Anything interesting happen over the weekend?
EUR/USD is back to Friday closing levels in morning trade in New York while USD/JPY is firmer as risk trades perform strongly.
Traditional expectations were useless in early Asian trade as EUR rallies strongly as did AUD.
The JPY reacted as one could have guessed by strengthening, but not for long, as risk aversion overwhelmed any impulse toward Asian currency strength.
I think we will see in coming days that China’s move over the weekend was much more of a political act than an act with significant near-term economic impact.
My one take-away from the early Monday price action as well as the commitments of traders report on Friday is that the market is much, much less short of EUR/USD than the were a week or two ago. Further explosive short-covering rallies are unlikely, as a result. If we rally, it will be because the market wants to, not because it has to…
EUR/USD trades quietly at 1.2378; USD/JPY changes hands at 91.28.
Hey there Jamie, hope everything’s alright over there.
Can we say that this eur surge to be largely or even solely derived on short covering (and some cyclical sovereign/institutional buying) given the apparent sterility of orders in the book and absolutely no fundamental change? However from your analysis I get a bit further to the confused side about the move in EURJPY since the asian opening.
There has been fundamental change, fms…Spain was thought to be asking for funding. Not true. So far, German data is holding up reasonably well despite turmoil in Europe…Crisis is passing without dissolution of EUR…That is big in and of itself…It is mostly short-covering, but partly because the EUR is expected to survive a near-death experience…We were less sure two weeks ago…
Major structural problems remain, but there are major structural problems all around the world. Europe will stay in the spotlight, but China’s move to at least consider currency strength suggests the global economy is in strong enough position to soldier on…
It’s very hard for me to relate to the news about european stability, or in any case to the way those news are being presented for almost two weeks now. Malta has caught up with Portuguese GDP; nobody who actually lives here sees any new employment, companies are stagnated or shutting down, the state still acts as its own best client and supplier, and sentiment is totally unchanged. At the same time, “we” know that the crisis is not passing in the very least of measures…