- Moody’s: Euro area sovereigns remain under pressure in absence of decisive intiatives
- S&P’s economist: EU summit made some progress, but doesn’t raise expectations
- Merkel to issue statement on Wednesday
- Sarkozy: EU accord is a “incontestable democratic progress” – Le Monde
- Deutsche Bank’s chief economist Mayer: Believes Italy “can make it”
- Deutsche Bank increases UK QE target forecast to £400 bln
- Periphery/German govt bond yield spreads widen out again
- ECB buys periphery bonds….again
- France may now be downgraded, says rating agency – The Independent
- Bundesbank rejects Europe’s funding ruse – AEP at The Telegraph
- Italian bond auction goes OK, attains 7 bln target
- French BTF auctions 13:50 GMT
Risk off at the start of the week. European stocks, oil, gold, US treasury yields all lower. Yada, yada, yada, you know the gig by now. Elsewhere, periphery/German bond yield spreads have experienced a marked widening, the market seemingly unimpressed with what came out of last weeks EU summit. The weekend press coverage was just plain harsh.
EUR/USD down at 1.3260 from early 1.3340, the move accelerating when stops tripped through 1.3290. Leveraged names notable sellers this morning.
Talk of 1.3250 barrier option interest and we’ve been as low as 1.3252 (EBS) Talk is the barrier interest has a panda whiff to it (ie China) BIS has been in buying in the 1.3250/60 area, helping provide tenuous support for the single currency.
Cable up at 1.5625, hardly changed from early 1.5630. Inbetween though we’ve been as low as 1.5534 and all the way back up. I don’t think the news that Deutsche sees UK QE up to £400 bln in 2012 (see above) helped sterling any in early trade.
However Middle eastern sovereign buying helped lend support, as did interest to sell the EUR/GBP cross (see below)
EUR/GBP down at .8485 fom early .8532, having been as low as .8477. Sources report a large pharmaceutical company having a decent interest to sell the cross this morning, apparently related to dividend payments.
USD/JPY little changed at 77.75.
AUD/USD down at 1.0120 from early 1.0175, aussie not helped by general risk off backdrop. As well as the euro zone crisis, there are increasing worries a slowing China could negatively impact the Australian economy.
