- Further evidence emerges that the Chinese property bubble is bursting
- China’s May PMI falls to 53.9
- Tensions inside EZ between Germany and France seen to be rising
- Argentina said to have delayed debt repayment deadline by 2 weeks
- Australian April retail sales +0.6% Vs 0.5% expected
- RBA leaves rates unchanged at 4.5% as expected
- ECB mid-term report creates more EUR pessimism
- Stockmarkets fall by 0.75% on average
- Gold rises back towards $1220/oz
It was one piece of bad news after another today and it’s a surprise that the EUR did not fall by more than it did, the AUD being the main target.
The ECB report yesterday into public financing did not make for good reading and as the market was asleep overnight due to the Memorial Day holiday in the US, Asia had the first opportunity to sell this morning. Der Spiegel report of rising tensions between Germany and France didn’t help the sentiment and when reports started circulating from the emerging markets that Argentina was delaying the repayment of some debt, it was again doom and gloom. The EUR has held up surprisingly well despite the bad news and has even risen against the GBP and the AUD. Sovereign bids are reported 1.2225/45. Ranges: EUR/USD 1.2246/1.2309; EUR/GBP .8455/72, EUR/JPY 111.33/112.26.
The AUD was the main sufferer today as all the bad news saw it emerge as the biggest loser on the day. Heavy corporate bids around .8370 soaked up a lot of the heaviest selling and allowed the AUD/USD to bounce very modestly. Ranges: .8354/.8476,
USD/JPY was again quiet, being used only as a tool for trading the crosses. Range: 90.89/91.26
Cable followed the lead of the EUR as can be seen from the relatively narrow range in the cross. Cable range: 1.4471/1.4539
Markets: Nikkei -0.7%, HK -0.7%, Kospi -1%. Gold +0.3% at $1220/oz.
