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EUR/USD grinds through 1.2945/50 offers, reaches 1.2957

Triggers a few stops above 1.2950 in the process.

Offers seen now in the 1.2980/1.3000 area with 1.3080 the real battle-ground ahead. A move through that level will suggest a medium-term bottom is truly in place.

Greek PM: Discussed debt swap with party leaders

• Political leaders positive, support government

This crap has been underway since October. Finish it. Please.

Japanese economy minister: Buy stuff already!

The FT reports the Japanese economy minister has been urging domestic businesses to take advantage of the strong yen to “snap up resources and increase overseas investments”.

We should use the strong yen assertively to invest and buy things, to be as proactive as possible,” Mr Edano said. “Japan is short on resources, so we need to use this opportunity to firmly secure rights to energy and commodities.”

This policy has been in place for the last several months with the Japanese government going so far as to set up a fund to help finance overseas takeovers.

Perhaps there is fresh emphasis being placed on it though given the recent price action in USD/JPY and EUR/JPY…

 

And now a message from the Swedish Finance minister

• Hopes China, Brazil, Russia will contribute to IMF
• Southern Europe will get worse before it gets better
• Positive growth signs from the US and Asia

Reuters: ESM draft treaty leaks

• Only members of the fiscal compact will be eligible for bailout cash
• Combined lending capacity of the EFSF/ESM remains at EUR 500 billion
• Capacity is a minimum; can be raised by governors of the fund once it is operational

 

EUR/USD not backing off

Looks like EUR/USD is building a base above the broken trendline at 1.2925 and it is now chipping away at offers in the 1.2945 region. A clean break targets a run at the psychological 1.30 level followed by the pivotal area of resistance at 1.3080.

Weidmann: “Nuclear option” (QE) would violate treaty

• Mustn’t give up the rule of law in saving the euro
• Not ECB’s job to redistribute risk by buying bonds
• Key to solving crisis lies with governments

Uncle Sam sells TIPS at negative yields

The Treasury sold 10-year inflation-protected securities at a negative yield, meaning investors are willing to receive 4.6 basis points less than the rate of inflation over the ext 10-years for the right to get their money back…

Another sign of risk aversion as investors look for return “of” capital rather than return “on” capital nearly 4-years after the sub-prime crisis derailed the global economy.

Fed sells $7 bln in AIG subprime bonds to Credit Swiss

The Fed offloaded a portion of the huge portfolio of subprime bonds acquired in the AIG bailout to Credit Swiss today. Terms won’t be announced until the next reporting period in April.

CS, Barclays, Goldman and BofA all apparently bid for the assets in an auction.

Buba’s Weidmann: Possible shrinkage in Q4

• German economy supported by domestic demand
• Economy to grow 0.6% in 2012, 1.8% in 2013
• Expects inflation to drop below 2% again
• December 9 fiscal compact is being watered down

“Shrinkage” always makes me thing of this..