- Spain needs to inform European Commission about recapitalisation plans for Bankia – Spokesman
- ECB’s Draghi: Credible recapitalization of EU banks needed
- More Draghi: Crisis has heightened risk aversion dramatically, previously acceptable levels of debt are no longer seen as sustainable
- Even more Draghi: 4 Greek banks now regain access to ECB liquidity following recapitalization
- ECB’s Visco: Political inertia, economic mistakes have put euro’s survival at risk, now need “change of pace” in decision making process
- Italy’s Monti: Sees country’s position hugely threatened by possibility of contagion. Lack of market appreciation for Italian reforms, reflected in borrowing costs, may cause popular backlash
- French FinMin: Euro bonds object of “lively discussions” with Germany. No perfect agreement with Germany on bank recapitalization
- BOJ’s Shirakawa: Sharp yen rises hurt corporate profits, sentiment, so negative for economy
- German May s.a jobelss total unchanged compared to Reuter’s median forecast of -5k
- German April retail sales (prelim) +0.6% m/m, -3.8% y/y vs Reuters’ median forecasts flat, +0.2% respectively
- EU May flash HICP +2.4% y/y, touch lower than Reuter’s median forecast of +2.5%
- French April consumer spending +0.6% m/m, stronger than Reuter’s median forecast of +0.3%
- India’s March quarter GDP growth 5.3% y/y, weaker than Reuter’s median forecast of +6.1%
- Swiss Q1 GDP +0.7% q/q, +2.0% y/y, stronger than Reuter’s median forecasts flat, +0.9% respectively
- Greek March retail sales -16.2% y/y after revised -12.9% in February
- Fed’s Bullard: Not right timing for easing in U.S. Fed should issue monetary policy report
- Spain thrown lifeline by Brussels with extra year to cut deficit – Independent
- Dublin forecasts 60% of voters will back EU fiskalpakt - Telegraph
EUR/USD sits at 1.2400, very marginally firmer from an early 1.2385. Middle Eastern sovereign buying helped light the fuse under an early rally and buying from Chinese names (we didn’t hear PBOC mentioned) helped accelerate ascent through 1.2400/10 area. Eventually buy stops through 1.2420 and 1.2425 were tripped on way to session high 1.2428. Whoopee!!
From there it was about turn and down again. Dutch AAA-rated name was again seen selling in this move lower. They were active sellers day before yesterday. The bank in question is actively supporting EUR/CHF on behalf of the SNB. So this ongoing EUR/USD selling is being seen as rebalancing out of the EUR/CHF purchases.
USD/JPY effectively unchanged at 78.80. Barrier option interest seen down at 78.50. Technically, 200 dma lines up just infront of this interest (78.59,78.60, 78.61 depending on who you talk to)
