- ECB and IMF working upon Spanish 300 bln bailout – Report
- German FinMin Schaeuble: Doesn’t expect ESM to be able to recapitalise banks directly by January 2013
- More Schaeuble: If one state can’t pay into ESM, size of ESM would shrink
- PBOC official: QE3 has global inflation risks. QE3 may push up commodity prices
- Dutch FinMin: Spain must show markets commitment to reform and implement austerity. If there is any financial support for Spain, it will come with conditions. Spain on right track
- Austrian FinMin: Greece can get more time, not more money
- Spanish banks borrowed 411.7 bln from the ECB in August
- Eurogroup converging around ‘more time’ for Greece – ekathimerini
Slow-ish morning burst into life, the main feature japanese yen weakness.
USD/JPY up at 78.10 from early 77.62, having been as high as 78.22 after buy stops tripped through 78.00. EUR/JPY up at 102.18 from early 101.15, having been as high as 102.23, the move accelerating when the 200 dma at 101.76 gave out and buy stops tripped.
Model funds notable buyers of USD/JPY. Next hurdle for USD/JPY bulls reported Japanese exporter sell orders clustered up at 78.30/50.
USD/JPY has been underpinned by sharply firmer US treasury yields, the benchmark 10 year treasury yield up at 1.8187% from early 1.7421%. There has been talk of BOJ checking USD/JPY rates, but that has little to really do with this move.
The yen is also being underminned by growing speculation the bank of Japan will signal more monetary ease at it’s meeting next week (rate decision next Wednesday, Sept 19th)
Another factor, increasing oil and commodity prices will harm the Japanese deficit.
EUR/USD up at 1.3085 from early 1.3028. Early rally fizzled out circa 1.3055 and we dipped back. Then as EUR/JPY took flight so did EUR/USD. Barrier option interest next at 1.3100. Not that that amounts to a hill of beans these days.
Ofcourse EUR/USD will have been undrpinned by the fact Perfect Pete has gone for 1.3125 before 1.2925 in the latest Forelive EUR/USD poll.
