Bernanke says that a tax on financial transactions would greatly deduce market liquidity. He agrees with the US Treasury’s rejection of the tax, which European leaders support.
EUR/USD is holding near session highs, now around 1.3670, despite reports that Greek and Portuguese credit default swaps both rose sharply today. Greek swaps closed at 435 bp, up 55 bp on the day. Portugal swaps closed at 183 bp, up 28 bp.
Either sovereign debt is fading as a concern or there is a flow in the market that is disguising the usual market concerns. We will only know in hind sight…
