- Euro group will not decide on Greece until October; adopt watered down budget rules; no solution for Finnish collateral yet
- Geithner a laughingstock as Europeans reject advice of indebted Americans
- US TIC data shows net long-term inflows of capital less swaps of $9.5 bln
- University of Michigan consumer sentiment 57.8 from 55.7
- Portugal says no knowledge of any other hidden debts
- Public sector involvement in Greek debt rollover seen at under 75%; 90% needed to move forward
- Greek FinMin to hold call with Troika on Monday to accelerate approval process amid talk cash running short
- ECB’s Stark: Europe not solving problems with bailouts, just buying time
- Geithner: Asked Europe to speak with one voice
- S&P 500 rises 0.6% to 1216, rises 5.4% on the week
EUR/USD dropped to session lows at 1.3752 early in the US session after stops below the 1.3770 level were triggered. Central bank buying had been rumored in the 1.3770/90 area in London and many cut-out once 1.3770 was breached. No sooner than the stops were triggered did we rebound and soon trigger topside stops above 1.3825. A spike to 1.3844 was soon but before you know it, it was back to 1.3775/ Most of the afternoon was spent between 1.3775 and 1.3795.
Very little was accomplished at the euro group meeting. No decisions have been made on Greece, other than to postpone a decision until early October. No TARP, no TALF, no leverage for the EFSF…None of the grand solutions that were floated as trial balloons during the week running up to the meeting.
Focus turns to the Fed next week as the slow-speed disintegration of the euro zone continues
For the week, we end off the highs for the euro but well above 1.3495 lows seen on Monday morning. Heavily oversold equities have corrected to the topside and the euro has largely followed. Should the Fed prove less aggressive than the market has priced in at present, we could see downward pressure in EUR/USD and equities return at mid-week.
Have a great weekend all! Best of luck.
