Stop-loss selling in the cable below 1.4475 set the tone for the session and we have seen big falls in the risk trades like AUD/JPY and on regional stockmarkets. Gold has rallied over $14.
- Regional bourses fall by up to 3%
- Japan machinery orders +5.4%
- Japans CGPI -0.2% YoY
- UK government seen softening on bank reform
- UK house price rise moderates in May
- German government to push for tighter fiscal discipline
It has been one-way traffic all session set off as mentioned earlier by the big stops in the cable below 1.4475. Cable fell from 1.4560 to 1.4430 and EUR/GBP rallied from .8500 to .8570 in the early part of the session. Large bids in the EUR/USD between 1.2330/40 managed to soak up a lot of the selling pressure during this time, leading to the big rally in the cross. Cable was unable to rally past 1.4450 and the next fall in thin lunchtime trade took cable to a session low of 1.4253 from where we have seen the first relief rally of the day. Ranges: cable 1.4253/1.4546; EUR/GBP .8500/90; GBP/JPY 131.05/134.35
EUR/USD struggled early to break below the strong bids at 1.2330/40, just above the low set during the GFC in late 2008. The pair oscillated between 1.2335/65 as EUR/GBP moved higher. Once the 1.2330 level was broken in lunchtime trade stops were quickly triggered below 1.2320. The session low was 1.2237 and strong bids around the 1.2250 level managed to soak up heavy selling and halt the vertical fall. Range: 1.2237/1.2372.
USD/JPY has gradually moved lower in line with the heavy selling of the JPY crosses with AUD/JPY and GBP/JPY down over 2% each on the session. Ranges: 91.84/92.41, 112.56/114.27.
AUD/USD opened at .8850, fell slowly in the initial part of the session but picked up momentum on the break below .8800. Ranges; .8728/.8861, AUD/JPY 80.10/81.92
Markets: Nikkei -2%, HK -2.3%, All Ords -2.5%, Kospi -2.6%. Gold +$15 to $1242/oz
