EUR/USD is falling back after a rally to the mid-1.3480s. Traders reported strong Middle Eastern sales around the 1.3500 level earlier int he day. That’s a shift from recent price action as the MidEast has been among the main buyers of EUR/USD in recent weeks. Has the euro lost one of its main sponsors? We’ll find out in the weeks ahead.
Traders not a research piece out from one of the Swiss banks predicting Spanish and Italian debt could head up to 9% yields from below 7% today.
Spanish yields are up 22 bp in the wake of the election over the weekend, now at 6.62%. Italy is at 6.75% in the 10-year maturity.
1.3420/30 remains key support near-term. Barriers at 1.3400 are rumored.
