- Spanish banks borrowed 132.4 bln from ECB in December, up sharply from 106.3 bln in November. Only just below the 140 bln record high back in July last year
- Italian auction
- SNB expects annual profit of CHF 13 bln and will be able to make distribution
- Buba’s Dombret: No sign of credit crunch in Germany. Risk of credit crunch for euro peripherals as well as Italy and Spain is notably higher (thought Italy and Spain were peripherals now)
- UK December producer output prices -0.2% m/m, +4.8% y/y, weaker than median forecasts of +0.1%, +5.0% respectively. Lowest y/y rate since December 2010
- Euro zone November nsa trade surplus 6.9 bln
- As crisis wrangling drags on, stakes rise for Europe – WSJ
EUR/USD lower on the day, down at 1.2800 from early 1.2860. Inbetween we’ve been upto 1.2878 and then all the way down to 1.2773.
Early rally bumped into decent selling from an Asian central bank 1.2870+. From there we drifted lower as euro longs booked profits ahead of the much-anticipated Italian auction.
The sell-off accelerated on news of heigthened Spanish bank borrowing from the ECB (see above). We stood just above 1.2800 as the Italian auction results came out, and although they were OK the single currency still came under some accelerated selling pressure.
We dipped as low 1.2773 before a fairly quick recovery, with Russia a notable buyer around the lows.
What’s it with 1.2800? It’s acting like a bloody strong magnet, although I haven’t heard anything regarding particularly large option expiries.
Cable down marginally at 1.5345 from early 1.5365. Buy orders now seen clustered 1.5300/15.
USD/JPY once again effectively unchanged, presently at 76.70. Same as yesterday, buy orders clustered 76.50/60, sell stops through 76.45. Sell orders clustered 77.00/10.
USD/CHF up marginally at .9455 from early .9420. EUR/CHF down marginally at 1.2105 from early 1.2120, having been as low as 1.2092. Talk of sizeable buy interest waiting down at 1.2090.
