- Fitch: ECB must do more to prevent ‘cataclysmic’ euro collapse
- Italian Social Democrat Party calls for exit from euro
- Monti warns of Italy protests ahead of Merkel meeting
- ECB’s Nowotny: Austria needs debt brake
- EU’s Schulz: ESM will get bank license
- German auction
- German 2011 real GDP 3%, as expected. 2011 public sector deficit 1% of GDP
- UK November visible trade balance 8.644 bln, slightly weaker than median forecast -8.4 bln
- German Bank Assoc Pres Schmitz: ‘Slight improvement’ in debt crisis
- World Economic Forum: Warns of rising imbalances, wider income gap
- Spanish banks try to build their way out of home glut – WSJ
- Hedge funds lock horns with IMF on Greek debt – Reuters
A good portion of this morning’s session was a snore. Then out of the blue the proverbial hit the fan.
EUR/USD down at 1.2700 from early 1.2745, having spent a short time below 1.2700 after the above Fitch comment hit the wires.
The pairing rallied initially amid talk of BIS/Middle Eastern buying interest, but it looked pretty laboured. We had already drifted back lower when Fitch helped add a note of panic to proceedings. Stops were quickly tripped through 1.2715 accelerating the sell-off.
Cable down at 1.5390 from early 1.5455. US investment house (not the usual suspect) very notable seller this morning. Stops through 1.5415 accelerated the sell-off.
USD/JPY effectively unchanged at 76.95.
AUD/USD effectively unchanged at 1.0280. China was a notable buyer in early European trade, helping the pairing rally nicely over 1.0300. The subsequent EUR/USD sell-off then let the air out of the balloon.
