- French FinMin says AAA credit rating not threatened- Moody’s thinks otherwise…
- Berlin experts fear euro break-up from bail-out escalation
- UK Sep CPI +0.6 %m/m +5.2 %y/y, RPI +0.8%m/m +5.6 %y/y
- German Oct ZEW econ sentiment index -48.3 vs -43.3 in Sep , (exp -45),
- ZEW ‘s Schroeder: Debt crisis uncertainty driving index down, could be a very soft recession for Germany
- EU officials: Main idea for leveraging the EFSF is to use it to guarantee first losses on new debt (Reuters)
- EU’s Rehn: Portugal’s delivery on its programme has been satisfactory
- EBRD’s Mirow: Recapitalization of EU banks is required to solve the Eurozone debt crisis, greater fiscal integration needed
The morning started as it meant to go on, with risk appetite slowly eroded by falling equities in Asia, which fed into Europe. France was under the spotlight again with Moody’s concerns over France’s public finances and a possible future downgrade taking centre stage despite comments from the French FinMin . Concerns on the EFSF rating as a result of any French downgrade adding to the negative.
EUR/USD was hit from the open by leveraged and real money sellers from 1.3780. Stops were taken out down through 1.3720 to 1.3685/90 where bids and some macro buying led a bounce to 1.3725/30, with a bit of assistance from the BIS around 1.3715/20.
A weaker German ZEW and comments from it’s economist Schroeder triggered more selling to 1.3657, where Sovereign bids coincided with similar interest in cable under 1.5700, to spark a bounce back to wards 1.3700. Buy stops now resting up through 1.3730
GBP/USD’s fall was partially slowed by EUR/GBP cross sales easing the cross from 0.8717 to 0.8690. A stronger set of CPI and RPI data failed to convince a market to rally as growth and QE fears outweighed. A quick burst up to 1.5785 on the release was immediately undone with bids filled down to 1.5710. A further push saw a low of 1.5695 before Asian sovereign and Russian buying interests turned the tide back up towards 1.5740/50
USD/JPY continues to be forgettable in a 76.65-86 happy in mid range of option interests that include a 76.00-77.50 DNT option play. EUR/JPY followed EUR/USD round the streets between 104.78-105.92
AUD/USD traded down from 1.0202 to 1.0118 tracking the EUR/USD , but sovereign buying interest was noted at 1.0160 and 1.0135/40 as well as UK fund demand at the lower level.
Gold dropped back from $1671 to $1655 with WTI Nymex crude shedding around 80 cents to 85.54
European stocks were all down with STOXX last down around 0.8%, FTSE off 0.-9%, CAC-1.4% and DAX -0.2%
