- Spain to present external bank assessment results at 15:30 GMT
- German opposition leader: Reached understanding with govt in fiscal pact discussions
- German ruling coalition’s parliamentary leader: Agreement on fiscal pact is good sign for Europe
- German government and opposition seeks to tax all financial instruments if possible
- Greek coalition parties seek 2 year extension to reach bailout fiscal targets – Leftist party leader
- French manufacturing PMI 45.3 in June, up from 44.7 in in May and better than Reuters’ median forecast of 44.5
- German manufacturing PMI 44.7 in June, down from 45.2 in May and weaker than Reuters median forecast of 45.2
- Euro zone June composite PMI 46.0, better than Reuters’ median forecast of 45.5. Unchanged from May reading, but still lowest since June 2009
- UK May retail sales inc fuel +1.4% m/m, +2.4% y/y, better than median forecasts +1.2%, +2.0% respectively
- UK CBI manufacturing order book balance -11 in June. Up from -17 in May and better than Reuters’ median forecast of -20
- Dutch May adj unemployment 6.2%, unchanged from April
- Dutch prices of existing homes fell by 5.5% year on year in May, the steepest drop in nearly three years
- BOJ’s Ishida: BOJ will take bold steps when needed
- Berlusconi, still a Kingmaker, raises specter of early vote – WSJ
Sterling improvement is probably the standout feature of this morning’s rather lacklustre trading session.
Cable up at 1.5717 from around 1.5680 first thing, EUR/GBP down at .8070 from early .8090. The improvement came on the back of surprisingly strong retail sales data (see above) and was underpinned by better than expected CBI data.
EUR/USD sits at 1.2685, all but unchanged from 1.2680 first thing. The single currency did get hit hard in the wake of surprisingly weak German PMI data (see above) which sent us to a session low 1.2642 before recovery. BIS was again a notable seller on the way down (having sold up around 1.2705 yesterday) Dutch bank also notable seller.
The release of slightly better than expected euro zone PMI data helped stop the rot eventually, with an ACB buyer notable around the lows. Relatively successful Spanish and French bond auctions, and announcement that German govt and opposition had reached agreement on fiscal pact, then provided the single currency with a little more support.
USD/JPY up at 79.95 from early 79.65. Talk of some stops now through psychological 80.00 level. US treasury yields firmer, benchmark 10 year up at 1.6640% from early 1.6350 which will be helping lend pairing support.
