- Italy Industry Minister Passera: Moody’s rating cut is an unjustified, misleading decision
- Italy Treasury undersecretary Polillo: Moody’s evaluation of Italian political risk is “entirely arbitary.” Moody’s rating cut not based on strong economic reasons. Even with stronger cyclical downturn, Italy will respect structural budget balance target
- German govt economic advisor Bofinger: Italy better placed than Germany in terms of structural balance
- Bank of Spain: Spain banks’ borrowing from ECB in June 365 bln euros, up from 324.6 bln in May
- Spanish Dep EconMin Latorre: Expects Spanish yields to decline
- Finnish parliament to discuss Spanish bailout on July 19
- Bank of England lending plan (FLS) may boost credit by at least £80 bln
- China’s PBOC 2012 stability report
- EU’s Almunia: We focusing on suspected cartel operation including collusion on setting interest rates after libor scandal
- It’s hotter in Karlsruhe than you think - FT.COM/alphaville
EUR/USD sits at 1.2198, very marginally easier from early 1.2210. Things have been very slow, with price action confined to 1.2181-1.2219 range. Half-hearted rally to session high coincided with release of Italian bond auction results. Some relief they went OK after the overnight Moody’s downgrade of Italian sovereign debt.
Talk of buy orders clustered down at 1.2150/60 ahead of well-documented 1.2150 barrier option interest. Asian offers said to be gathered up at 1.2220/30
USD/JPY effectively unchanged at 79.25. Light sell stops said to lie through 79.20 and more through 79.00.
USD/CHF up 10 pips on the moring at .9845. Talk of barrier option interest lying in wait up at .9900.
