• German April IFO best in nearly two years, 101.6 consensus 98.6
  • UK Q1 GDP rise weaker than expected, 0.2% q/q
  • EZ Industrial Orders rose 1.5% in Feb, f’cast + 0.8%
  • PM Brown – cutting spending this year risks return to recession
  • PM Brown – GDP figures show the recovery is definitely underway
  • Greek/German 10-yr bond yield falls to 534bps, Greece Requests Aid
  • German Govt Source says potential delays in German parliament would not jeopardise Greek aid
  • Moody’s reviews six Greek banks for possible downgrade
  • Greece officially activates EU/IMF aid package

Theme – once more Greece dominates proceedings. After a horrific slide in early Sydney EUR/USD recovered modestly in early London but took off once CNBC announced that Greece was to officially activate the aid program. 10-yr bond spread narrowed, CDS’s fell, Greek bank shares rose strongly and EUR/USD got to 1.3347. AUD/USD was volatile; fell sharply in Sydney though into London after oblique statement from RBA Governor sees chance of a May rate hike fade. Once momentum slowed AUD/USD rebounded 40 pips then slid again. GBP/USD supported by talk of a good bid at 1.5330.

[EUR/USD] fell like a stone just after the NY close to 1.3201. Settled 1.3220ish in Asia for the rest of the session then started to recover in early Europe. Good German IFO number and EUR/GBP and EUR/AUD short covering supported. Really took off when CNBC announced that Greece were preparing to activate the EU/IMF loan package. Pair got to 1.3349 before settling 1.3320ish. Just after the official announcement announcement the single currency dipped back below 1.33. Intraday range 1.3201-1.3347; last at 1.3308

[USD/JPY] has been somewhat sidelined today with Greece (and thus the Euro) once more taking centre stage. Intraday range 93.31-93.64; last at 93.44.

[GBP/USD] opened in Asia around 1.5380 before falling sharply in sync with the EUR/USD nose-dive. Bottomed out at 1.5315 then settled 25/55 for rest of the session in Asia. Pair has witnessed a very choppy session in London, rallying initially in line with EUR/USD then falling sharply on a smaller than expected rise in Q1 GDP. EUR/GBP short covering also kicked in. Pair then started to rally again, led by EUR/USD but in an unconvincing manner. Talk of a sovereign bid at 1.5330 has lent support. Intraday range 1.5315-1.5399; last at 1.5368.

[AUD/USD] was doing very little in Asia until RBA Governor Stevens said rates were close to average adding that the future course of rates was an open question. The Sydney market pushed the pair down to 0.9210 on this perceived dovish outlook with early London joining in before the pair bottomed out at 0.9184. The Euro rally got it back above the figure then the activation of the Greek aid package got it back into the 0.9230s. The shorts had been squeezed and the pair fell back to the figure. Intraday range 0.9184-0.9268; last at 0.9214.

Stocks in Asia were mostly down. Nikkei -0.3%, Hang Seng -1.0%, Sydney -0.5%. Europe has been quite perky, FTSE up 0.8%, DAX up 1.3% and CAC up 0.4%. Gold down $2.00 from the NY close. US futures have climbed back into the black after spending most of the day in the red after Amazon and Microsoft earning disappoint.