- Further unrest in Egypt led to widespread risk aversion in financial markets
- Regional stockmarkets are 1.25% lower on average
- Reports of a “Brady plan” for Greece saw the EUR under pressure in early trade
- New Zealand December trade balance -NZD250 million
- NZ Treasury see no recession in Q4 and are optimistic for 2011
- Japanese manufacturing PMI rises above 50, showing expansion in industry
- Australian inflation gauge +0.4% MoM
- New head of UK’s CBI is optimistic about economy
- Talk of Sovereign buyers close to market in EUR/USD, USD/JPY and USD/CHF
The EUR was the main mover in early trade with the report on Greek bondholder ‘haircuts’ as well as the unrest in Egypt and Tunisia encouraging widespread risk aversion. EUR/USD fell on numerous occasions towqards the 1.3570 level where Sovereign bids are runoured to be solid. Asia again lacked the momentum to break lower and we have since returned to the NY closing level. Range: EUR/USD 1.3571/1.3617, EUR/CHF 1.2778/1.2823
USD/JPY has been supported under 82.00 by sightings of Kampo and there are supposedly bigger bids at 81.70/80. The JPY crosses fell early on the general risk aversion mood but have since rebounded. Range: 81.92/82.23
Cable has been fairly quiet in a 50 pip range, 1.5822/71 and the cross traded .8565/88
AUD/USD tried hard to trade lower and trigger talked-of stops below .9850 but once again momentum was missing and the intraday bears have been forced cover. Ranges: .9868/.9928
