• White House says both sides of aisle agree $1.5 trln in cuts -Dow Jones
  • US Treasury Sec Geithner: After meeting Senate Democrats, running out of time to cut bipartisan deal to raise US debt limit. Democrats are united on making sure US will pay its commitments
  • US Jobless claims for week ending July 9 fell to 405,000 (exp 415,000) from 427,000 previous week
  • US Business inventories for May + 1% (exp +0.8%) unchanged from April. May business sales -0.1% vs April +0.1 %
  • US June retail sales +0.1% (median -0.1%) vs May -0.1% (prev -0.2%)
  • US June PPI -0.4% (exp -0.2%), vs May +0.2%. June PPI y/y +7% (exp +7.4%) Core +2.4% (exp +2.2%)
  • Fed’s Bernanke: Treasury default would be a “calamitous outcome”
  • Fed’s Bernanke: Even if Treasury prioritizes payments to bondholders, failure to raise debt ceiling would boost interest rates
  • Fed’s Bernanke: Decision of whether Fed could buy defaulted treasuries would be up to the FOMC as a group
  • Dutch PM Rutte: Agrees with Germany’s Merkel only need for EU summit on Greece if there is a definite chance of agreement
  • IMF, EC and ECB: Irish budget deficit projected to be below 10.5% of GDP in 2011
  • Italy’s Senate approves austerity measures in confidence vote
  • IMF’s Chopra: Signs of a turnaround in the Irish economy
  • Greek Development Ministry says 14 bln Euro in aid to be made available through EU funds
  • S&P warned lawmakers privately that it will downgrade US debt if Treasury was forced to prioritize payments-Congressional aide
  • White House considering weekend debt meeting with congressional leaders at Camp David- sources familiar with the matter
  • House Speaker Boehner: Told White House he sees no need to take debt talks to Camp David this weekend
  • Fitch cuts 4 Greek banks
  • IMF: G20 surveillance note says US delay in raising debt ceiling increases downside risk for global economy
  • Portugal Fin Min says economy expected to contract 2.3% in 2011, 1.7% in 2012

Not the most inspiring of sessions, with the EUR/USD trading around 1.4140-1.4250 for most of the day. Data releases in the morning had little effect ahead of Bernanke’s testimony. Dollar later got a boost from Bernanke’s remarks (see above) as Europe wound down, but at the expense of equities.

News that the White house agreed a $1.5 trln in cuts boosted the equities again, but failed to recover to earlier highs, and fell back again as EUR hit a day’s low of 1.4115 after comments from Tres Sec Geithner (see above)

Cable had little to say in the session in a 1.6105-62 range with EUR/GBP in a 0.8757-0.8820 spread.

Other currency pairs failed to break out of ranges set up in Europe with USD/JPY trapped between 78.90-79.30 ,and EUR/JPY tracking the EUR/USD through 111.73-112.70

Similar story for the commodity based currencies with AUD trading 1.0706-87, closing towards the lows as euro was sold off late in the session.

Gold hit new highs of 1594.16 in Europe but gave back $14 before recovering to 1587