• Swedish FinMin: Quite clear Greece implementation has failed. Difficult for Greece to agree bailout
  • Greek FinMin Venizelos: Greece aims to conclude debt talks by Feb 1
  • Euro zone flash January composite PMI 50.4, up from 48.3 in December and much better than Reuter’s median forecast of 48.5
  • Euro zone November industrial orders -1.3% m/m, -2.7% y/y, stronger than median forecasts -2.2%, -2.7% respectively
  • Dutch auction results
  • Spanish auction results
  • UK December PSNB 10.791 bln, better than median forecast of 12.2 bln
  • UK public sector net debt ex-financial interventions rises to 1 trillion for first time since records began
    :(
  • UK Treasury: Debt total over 1 trillion shows “unsustainable level of spending” over past few years, critical to deal decisively with deficit
  • BOJ Gov Shirakawa: Board agreed timing of Japan recovery delayed

Well, well, well, that was fun wasn’t it? Nasty morning session will have taken it’s toll.

EUR/USD hardly changed at 1.3000 from early 1.3015. But that doesn’t begin to tell the tale. Comments from Swedish Finance Minister regarding Greece (see above) helped put EUR/USD under a little early pressure despite Middle Eastern buying .

We slipped below 1.3000 only to run into BIS buying around 1.2995 and were quickly back above 1.3000. This early price action just didn’t prepare us for what was to come.

All of a sudden EUR/USD caught fire and we spiked higher. The exact reasons for this sudden popularity to be honest escape me. I guess decent euro zone PMI data helped somewhat, but it doesn’t really explain the ferocity of the rally. Timing was a bit off if you ask me. Decent buy stops were tripped in the EUR/JPY cross through 100.50 and I guess that helped lift EUR/USD (sorry, that’s the best I can do)

We got all the way up to 1.3062 before doing an abrupt about turn and selling off even quicker than we rallied. Sources were quick to point the finger at a large US hedge fund. Talk had the fund selling “truckloads of euros” through two UK clearers.

Talk now has sell stops through 1.2985 or 1.2985, take your pick. It’s always nice to have choices. On the topside 1.3080 remains important resistance. More buy stops seen through said level and again through 1.3100.

USD/JPY up at 77.30 from early 77.00, having been as high as 77.39. Fund buying noted. Stops seen through 77.40.

USD/CHF hardly changed, up at 9275 from early 9268. EUR/CHF steady at 1.2065. Talk of “very large bids” on EBS ahead of 1.2050. Who would have thunk it?

:)