USDCHF currently 0.8910 the run lower having stalled with the bids at 0.8900. Safe-haven Gaza related CHF buying
Sellers 0.8925-30 0.8940 0.8960-65 0.8985 0.9000-10 0.9025
Buyers 0.8900 0.8885 0.8865 0.8850
EURCHF currently 1.2141 with the 1.2150 bids now chewed through
Sellers 1.2165 1.2185 1.2200 1.2225 1.2235-40 1.2250
Buyers 1.2140 1.2100 1.2085 1.2050
USDCAD currently 1.0662 going nowhere fast. The 1.0645-50 bids I posted yesterday keeping a base for the moment
Sellers 1.0700-05 1.0720 1.0735 1.0750 1.0765 1.0785 1.0800
Buyers 1.0645-50 1.0630 1.0610-15 1.0600 (barrier option) 1.0585 1.0550
NZDUSD currently 0.8804 finding some safe-haven risk-off support in the dips
Sellers 0.8825 0.8840 0.8850 0.8900
Buyers 0.8775-80 0.8765 0.8750 0.8725 0.8700 0.8685
Reuters report that the UK’s Financial Conduct Authority says that 15.1% of mergers in 2013 were preceded by suspicious share price moves. That’s up from 14.9% the prior year but well below the 30% level seen in 2010.
The details come from the FCA’s annual review
The FCA is also under pressure from MP’s to start a probe into stock price manipulation that could be greater than the LIBOR scandal as reports come out that stock traders manipulate the closing prices to boost profits and bonuses.
And if that wasn’t enough there are calls for them to look into claims that stock advisers of flotations have been putting unfair pressure on analysts to hike prices
Further to Ryan’s post yesterday we’ve seen Espirito Santo Financial Group, which owns 25% of the lender, suspend trading in its shares and bonds today saying it’s “currently assessing the financial impact of its exposure” to Espirito Santo International, which has missed payments on short-term paper.
While the Bank of Portugal said the lender can avoid “contagion risks,” investors facing losses on the notes may try to make a claim against the bank, according to a Bank of America Corp report
European equity markets are taking a big hit on the contagion fears with PSI 20 down 3.97% at 6119, IBEX down 2.1% at 10532, DAX down 1.45% at 9667, FTSE down 0.8% at 6667, CAC40 down 1.44% at 4296,
US DJI and S&P also getting a knock lower as a result.
Portugese 10-year govt bond yields up 13 bps at 3.94%
Thanks to Amit for heads up and Lilac for this link with more detail from Bloomberg
All adding to a risk-off/safe-haven sentiment as JPY and CHF buying noted too with increasing turmoil in Gaza playing its part
- Portuguese HICP -0.2% vs -0.3% exp y/y. Prior -0.3%
- CPI -0.4% vs -0.2% exp y/y . Prior -0.45
- Ireland HICP 0.5% vs 0.4% prior y/y
- CPI 0.4% unch
Only a small part of the puzzle but it going the right way.
As Japanese data overnight disappointed the yen pairs are soft again and we’re on the slide.
USD/JPY is getting near good support at 101.20 ahead of the next big level at 100.75
USD/JPY daily chart 10 07 2014
GBP/JPY has dropped through support at 173.68 and the’re more at 173.30/40. The good stuff isn’t until 171.30/60 were we have a mix of trendlines and the 100 dma.
GBP/JPY daily chart 10 07 2014
EUR/JPY is coming up against the 2014 support at 138.02 and if it breaks below here and support at 137.65/75 then it might be a quick trip down to the early Feb lows at 136.20
EUR/JPY daily chart 10 07 2014
Nikkei futures are carrying on where the index finished and are now down 130 ticks to 15120. US 10′s are also off 3bps to 2.52% and a break of 2.5% could put the cat among the dollar pigeons.
US 10 year yields 10 07 2014
So says Bank of Italy governor Ignazio Visco
- Italian banks could draw in excess of $200bn from TLTRO’s
- ECB ready to consider new measures after TLTRO’s including acquisitions of assets on large scale
- Expects NPLS to fall by €5bn after sales through 2014
- State intervention could help banks offload NPLS as long as steps are compatible with EU rules
- Central bank is expanding range of loans that can be used as collateral for ECB funding
- Crisis has exposed inadequate, imprudent and incorrect behaviour at Italian banks
With the upcoming stress tests banks are still running around like headless chickens trying to clear the decks of things like non performing loans and it looks like the central bank wants to help with that. That’s a good idea in principle but it potentially means that it amounts to nothing more than window dressing while the crap is shoved out of the way somewhere.
On a short to medium term basis the trade balance isn’t looking to hot but the biggest driver of imports in May was from aircraft, which rose by more than £400m to around £1.2bn. They are big ticket items so it’s unlikely to last meaning we see the deficit shrink somewhat.
There’s good and bad news in the data concerning Europe. Exports to Europe fell 0.2% while imports increased 1.6%. It shows that buying by Europe is still weak yet they are selling, which is good from Europe’s point of view. I checked the aircraft data and the £400m is split roughly 50/50 between Europe and non-Europe so those imports are not solely down to that.
Overall UK exports were up 1.1% vs -2.7% in April and imports were +2.0% vs 0.1% prior.
On a 3 month average exports rose 1.6% from -0.1% and imports were +1.9% vs -1.1%.
The UK has always been net importers, as you can see from the chart below, even well before the crisis.
UK trade balance 10 07 2014
It’s something we really need to work on if we want to add to the recovery. Unfortunately our biggest trading partner, Europe, is the one who can really help us out but they are a long way from being in a position to do so.
The rise in exports also partially thumbs it’s nose to the value of the pound. People are quick to blame the currency when exports turn sour so there’s nothing they can say when they rise. Yes it will be having an effect but at the moment it doesn’t seem to be overly detrimental.
- GBP -8.812 bln prev revised up from -8.92 bln
- non EU GBP -3.961 bln vs -3.4 bln exp vs -3.876 bln prev revised down from -3.78 bln
Another awful reading for the trade deficit and that’s with GBP up here and a nation of net importers
Surely I can’t be the only one that always flinches at this release?
GBPUSD down to 1.7121 from 1.7133
Key tech support between 1.7105-15. Bids 1.7100-10 too
UK trade balance
Currently on session lows at 138.35
Sellers 138.70 138.85-90 139.00 139.25 139.50 139.80 140.00
Buyers 138.10-15 138.00 137.70(stops below) 137.50 137.00
Currently 0.7957 after sellers appeared above 0.7965 ahead of trade data at the bottom of the hour .
Sellers 0.7975-85 0.8000-10 0.8025 0.8035 0.8040-50
Buyers 0.7940 0.7925 0.7910 0.7900 (reported barrier option) 0.7885 0.7875
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