- Swiss real Q-1 GDP -0.8% q/q, -2.4% y/y vs median forecasts -1.5%, -1.70% respectively
- French April producer prices -0.9% m/m, -6.4% y/y, weaker than median forecast -0.1% m/m
- Spain’s May jobless falls 24,741 vs 39,478 rise in April, first decline in 14 months
- Swiss May PMI 39.8, better than median forecast of 36.5
- UK April mortgage approvals 43,201 vs 40,038 in March, better than median forecast of 41,000
- UK April mortgage lending +£0.973 bln vs +£0.640 in March, in line with median forecast of +£1.0 bln
- UK May construction PMI 45.9, better than median forecast of 39.1
- Euro zone April unemployment 9.2%, worse than median forecast of 9.1%, highest since September 1999
- Kremlin says BRIC summit this month may discuss idea of supra national world currency
- Geithner says China, U.S. expect dollar to be main reserve currency for long time, Says Chinese officials questioned him about U.S. recovery, not deficits
European morning trade was very much a game of two halves. First half was very much a case of sterling weakness. The U.K. currency was underminned by the news that International Petroleum Investment Co (IPIC), owned by the Abu Dhabi Government, was offloading it’s shares in Barclays. The perception that cable had temporarily topped out at 1.6500 didn’t help matters.
Cable slipped under 1.6400 early. Then on at least three seperate ocassions it tried to rally back over said level only to run into ongoing BIS selling. Eventually the persistent BIS selling took it’s toll and we saw a stop-fuelled sell-off to a 1.6325 session low.
Cable was already recovering a little when the second half of play got underway, with the USD coming under heavy across the board selling pressure. The trigger was the news that the leaders of the world’s biggest emerging markets may discuss the idea of a supranational currency later this month when they meet for a summit in Russia.
EUR/USD has been up to 1.4242, cable up to 1.6465 and USD/JPY down to 95.49 in the wake of the news.
