- Germany, Netherlands, Luxembourg rating cut to negative by Moody’s.-bbg
- Azumi came through with his usual verbal intervention . “Won’t rule out any options to combat FX moves.
- Geithner on economy, Libor, Europe, ‘fiscal cliff’. -wsj
- Fed’s Raskin: Proprietary trading has “low or no real economic value”, should not be done by banks that have government backstop. Expects to discuss QE3 possibility in next FOMC meeting. Says Fed continues to monitor impact of low rates. MNI
- China leading economic index rose 0.1% in June .
- Chinese HSBC preliminary flash PMI hits 5-month high of 49.5 in July . – BI
- RBA’s Gov. Stevens says Australia economic performance has been remarkably good given the global background. Says Chinese data consistent with GDP growth of 7 to 8 percent. Says had expected Australian unemployment to be a bit higher than it is. He could allow bigger swings in budget to deal with any slowdown.
Euro: Moody’s came out with the downgrades of Germany, Netherlands, and Luxembourg just as the market was searching for the stops at 1.2150. The rally was short-lived (1.2137 high) and fell back sharply to session lows of 1.2106. Then went through the rest of the night consolidating between 1.2115/25.
Usd/Jpy: After the usual verbal intervention Usd/Jpy was a non-event trading around 78.25 most of the session .
Aussie $: Had one quick 20 pip rally after the China PMI number but quickly fell back to the 1.0275/85 level . Looks now to have found fresh buyers possibly on RBA’s Stevens very upbeat Australian outlook . Aud trading at the highs of the session at 1.0300.
No strong feelings for later but maybe just a bit of consolidation if Spain, Greece , and Italy would be so kind as to give us a much needed vacation .
