- CIT likely to file for bankruptcy Friday - Report
- BOE’s Barker: Expects QE impact to come through more strongly next year. Would not have expected to see improvement yet in bank lending. “Tentative” risk QE could drive inflation higher, but feels it’s a long way off – Newspaper Interview
- French June EU-harmonised CPI +0.1% m/m, -0.6% y/y, slightly weaker than median forecasts of +0.2%, -0.5% respectively
- Spanish house sales fall 32.2% y/y in May vs 47.6% in April – INE
- Italy May world trade surplus 1.187 bln euros vs May 2008 deficit of 84 mln – ISTAT
- Swiss ZEW investor sentiment flat in July, down from 9.7 in June
- Japan Oppostion Lawmaker: Shouldn’t intervene in forex markets unless currencies move abnormally. No need to change forex reserves management as confidence in d0llar still high
- $20 oil this year on “devastating” crude glut - Verlanger, former U.S. govt advisor
- JP Morgan Chase reports Q-2 earnings of 28 cents, much stronger than median forecast of 4 cents
Quiet morning until the release of JP Morgan Chase earnings. Early on risk sentiment was looking somewhat fragile, underminned by the news that CIT was likely headed into bankruptcy, filing possibly as early as tomorrow.
EUR/USD and GBP/USD reached session lows of 1.4056 and 1.6355 against this backdrop. Both pairings were recovering (EUR/USD around 1.4100, GBP/USD just above 1.6400) when the news hit that JP Morgan had beaten the earnings estimate by a huge margin.
This ignited risk appetite with EUR/USD soaring to 1.4137, GBP/USD to 1.6459 before settling back. Sources note sell orders now lined up at 1.4140/50 and 1.6490/00 in the respective pairings.
USD/JPY hit a session low of 93.53 against the backdrop of dulled risk appetite/lower U.S. yields before recovering nicely on the JP Morgan news, presently at 93.95. Sources note buy orders down at 93.50, sell orders up at 94.20/50.
