- German July GFK comsumer sentiment indicator rises to 5.7 versus June 5.6 (revised 5.5). Consensus 5.3.
- German May import prices -0.6%m/m, +8.1% y/y (vs April +0.3% m/m, +9.4 % y/y)
- Ailing Greece tries national tag sale
- Merkel: German economy has best prospects for strong growth
- Merkel: China told them has massive interest in stable euro
- Chinese PM: European difficulties are temporary
- China’s Wen: Chinese and German companies signed deals worth over $15 bln during visit to Berlin
- UK final Q1 GDP +0.5% (unrevised), +1.6% y/y (revised down from +1.8%)
- Italy June business confidence falls to 100.5
- EU’s Rehn: Only way for Greece to avoid immediate default is for parliament to pass economic programme
- Spain PM: Economic recovery to gather pace from H2
- BOE’s King: Problem of debt goes much wider than the Euro area, not helpful for anyone to speculate on Greek default.
- BOE’s King: More transparency about sovereign exposure may help, expects to see relatively weak consumer spending ahead
- BOE’s Dale: Has revised down medium-term outlook for level of GDP, inflation likely to remain above target for much of the next 2 years, sufficient concern in market about Greek default to think carefully about contigency plans.
- EU Commission: No official negotiations with private sector on Greece.
- IIF managing director: Greek sovereign debt crisis most complex he has been connected with
- Italy Northen League Leader Bossi: Govt risks falling over austerity budget
EURUSD headed lower at the European open on back of Eastern European sales. Tripped stops through 1.4270 on way to the low 1.4250’s where model fund accounts and an Asian sovereign bought the euro aggressively. The euro bulls were helped by positive comments from the Chinese PM (see above). Leveraged buyers then helped take the euro to session highs of 1.4328 where it ran into decent selling from China. That caused EUR/USD to engage reverse gear and it’s been as low as 1.4237 in increasingly choppy, nervy trade. We’re presently at 1.4275, little changed on day.
USD/JPY was throttled into a 80.73-91 range leaving trading mostly to the crosses, as exporter offers continue to plague the bulls in the 80.80’s. Crosses largely tracked the euro with EUR/JPY inching to a day’s high of 115.79 before heading down with EUR/USD to 115.24.
Cable lagged behind the EUR/USD rise as Swiss buying in EUR/GBP left little chance of a test of the 1.6000 offers, falling back after the GDP release and MPC comments to 1.5912 before later recovering to 1.5960. Barrier option interest remains at 1.5900. Buy stops noted through 1.6005.
AUD/USD was largely sidelined with support around 1.0440/50 holding the base in Europe, but offers from prop accounts and option traders towards 1.0480 continue to cap.
GOLD has pulled back up from $1497 towards $1504, but currently lacks any momentum, with WTI crude restricted to a $90.43-91.33 range.
