- Media reports CIT has reached $3 bln rescue deal with key bondholders, which will allow it to avoid bankruptcy
- UK July house prices +0.6% m/m, -3.1% y/y – Rightmove
- UK mortgage lending up 17% in June - Council of mortgage lenders
- German June PPI -0.1% m/m, -4.6% y/y, biggest annual fall since December 1968, weaker than median forecasts of +0.5%, -4.1% respectively
- German economy likely did better in Q-2 than previously expected – Bundesbank
- Dutch July adj consumer confidence -24 points after -24 in June – CBS
- Dutch trade surplus widened to prov 2.535 bln in May from a revised 2.433 bln in April
- Net lending to UK businesses -£3.4 bln in May from -£6 bln in April. Mortgage approvals in June 51,100, up from 45,000 in May. Gross mortgage lending by major lenders £9.2 bln in June, up from £8.6 bln in May – BOE Trends in Lending report
- UK June prov M4 broad money supply growth -0.2% m/m, weakest since June 2005, +14.2% y/y
Risk appetite is in good shape at the start of the new week, bolstered by news CIT has reached a $3.0 bln rescue deal with key bondholders, which will hopefully stave off bankruptcy. This has served to undermine the USD and JPY.
EUR/USD is up at 1.4225 from an early 1.4165, having been as high as 1.4248. The expected defence of 1.4200 barrier option interest proved alot softer than many had expected.
Decent stops were triggered on the move through 1.4200. I think the stops were actually just above 1.4210, but that’s somewhat splitting hairs. Talk now of more option interest up at 1.4250.
Cable is up at 1.6515 from an opening down around 1.6395, stops triggered just above 1.6430, 1.6460 and 1.6500 accelerating the upside move. Apart from the heightened general risk appetite, we’ve also seen some encouraging data on the UK housing front (see above), which has helped underpin cable.
USD/JPY has been effectively sidelined. Presently sits at 94.65, unchanged on the day.
EUR/JPY has moved higher against the backdrop of heigthened risk appetite, presently at 134.60 from an early 134.00. Sources note sell orders now lined up at 134.70 up through 135.00, where barrier option interest is said to lie.
