- Japanese insurance agency head: No need to prepare for payments by swapping dollar for yen
- Japan nuclear agency: Cannot confirm if water is covering spent fuel rods at Fukushima NO4 reactor
- Japan trade minister Kaieda: Govt has asked to boost run rate at oil refineries in West Japan to 95% or more. Very worried about rise in yen
- Japan Upper House chief: Should temporarily close Tokyo stock, forex markets to prevent turmoil – Kyodo
- Spain sells 3219 mln of 2021 bond, 911 mln of 2041 bond. Seen solid result. Helps give euro lift
- Swiss National Bank holds target range for 3-month swiss franc libor unchanged at 0.00-0.75%. Continues to aim for 3-month libor at 0.25%. As expected
- Swiss govt raises 2011 GDP growth forecast to 2.1% from December forecast of 1.5%
- Bank of England: UK inflation expectations for year ahead +4.0% in February, highest since August 2008 and up from 3.9% in November
- World energy crunch as nuclear and oil both go wrong – AEP at The Telegraph
- ECB’s Nowotny: Japan’s need to buy oil could pressure oil prices
The US dollar is generally weaker this morning, to varying degrees.
EUR/USD up at 1.4020 from early 1.3925, having been as high as 1.4052 at one stage. Middle Eastern buying, not for the first time, was very notable in early European trade. BIS was then seen on both sides of the market, buying around 1.3950/55 and then selling around 1.3975/80.
The rally accelerated upto the 1.3990/00 area, where reports had decent sell orders lined up. And so it proved the case and quite a battle between euro bulls and bears ensued. Middle Eastern selling was noted up there (some profit-taking I guess)Finally though the release of solid Spanish bond auction results helped the euro bulls gain the upperhand.
Stops just above 1.4000 were duly tripped accelerating the rally. Defence of well-touted 1.4050 barrier option interest was surprisingly weak and the structures were taken out with consumate ease on the way to 1.4052 session high. There then ensued the usual profit taking.
USD/JPY has given ground again. Down at 78.45 from early 79.10. US investment house seen selling early above 79.00. The news from the Japanese nuclear plant continues to look dire and will be helping keep the pressure on the pairing.
Cable up at 1.6145 from early 1.6030 having been as high as 1.6169. But it certainly wasn’t a straight forward ascent, having been interupted by a couple of decent sell-offs along the way. The Bank of England reported a rise in inflation expectations (see above) which will have provided support.
AUD/USD at .9820 only very marginally easier from early .9830.
