- German BGA export assn Pres Boerner: Urges Merkel and Sarkozy to agree to introduce euro zone bonds at Tuesday’s meeting
- German govt spokesman: Eurobonds will not be on the agenda at meeting with Merkel and Sarkozy No one should expect major breakthrough at tomorrow’s Merkel/Sarkozy meeting
- BOE’s Miles: UK economy on fragile recovery. Now not right time for more asset purchases
- EU’s Rehn: Don’t expect Italy, Spain, France to tap rescue funds – Dow Jones
- Spanish 5 year credit default swaps fall to 341 bps, down 12 bps on day
- ECB is euroland’s last hope as bail-out machinary fails to resolve crisis – AEP at The Telegraph
- Euro zone probably wouldn’t survive insolvent Italy – Guenther Oettinger in Handelsblatt
- Sarkozy set to clash with Merkel over euro bonds – The Independent
Generally quiet morning, with EUR/CHF being where the main action was. Started around 1.1270 and rallied strongly early all the way to 1.1458, amid speculation the SNB will be moving to peg the franc to the euro in the very near future. Big German and US investment bank notable buyers.
We’ve subsequently fallen all the way back to about where we started, presently at 1.1300, the market seemingly becoming a little more circumspect. Comments from German spokesman, not to expect too much from tomorrows’ Merkel/Sarkozy meet, haven’t helped the single currencies’ cause.
EUR/USD down at 1.4275 from early 1.4295, getting hit late morning by the German spokesmans’ comments.
Cable little changed at 1.6295. Comments from BOE’S Miles, which were mildly hawkish, have helped lend some underpinning.
USD/JPY unchanged at 76.85.
AUD/USD sits at 1.0395. Barrier option interest tipped at 1.0450, sell orders protecting said interest around 1.0440.
