• Portugal PM, opposition leader agree new measures to cut 2010 budget gap by about 2 bln euros – Reuters source
  • U.S. prosecutors ask if 8 banks duped rating agencies – New York Times
  • Merkel: Stabilisation of the euro is an existential matter. Maintains vision that one day all EU-member states will join euro. Failure of the euro would be a failure for Europe. Crisis is an opportunity for EU to strengthen economic and political union, not just common currency
  • Leader of Spain’s biggest union: General strike over cuts “last thing this country needs”
  • Shanghai stock index ends up 2.1%, biggest percentage gain in 6 weeks
  • UK government says agreed 5% pay cut for all ministers – statement
  • UK March global goods trade balance -7.522 bln, much worse than median forecast of -6.41 bln
  • Greek February unemployment rises to 12.1% vs 11.3% in January

Things started out quite brightly, European stocks following their Asian conterparts higher, and then things just sorta fizzled out somewhat.

EUR/USD started around 1.2655 and rallied early, but sell orders noted up at 1.2690-1.2710 were never really threatened. A big German bank (infact THE big German bank) came in selling aggressively and we fell quickly. Buy orders were noted down at 1.2600/10 but a US bank helped push these aside.

Stops tripped just below 1,.2600 and we fell to session low 1.2563, just above noted buy orders at 1.2550/60. BIS seen buying at 1.2585, could have been in lower. So in recent days seen them as sellers above 1.2700 and buyers below 1.2600. Ummm.

Cable started around 1.4860 and rallied fleetingly above 1.4900. Didn’t last long though. The pairing was already under fairly heavy pressure when very poor trade data (see above) helped trip stops through 1,4800 and we’ve been as low as 1.4747 so far. We’re presently at 1.4770.

USD/JPY has had active morning. Started around 93.20 and got as high as 93.64 (just shy of stops through 93.65) and that was that. As European stocks started to give up ground, so did EUR/JPY and USD/JPY.

Buy orders at 93.00/10 were eventually taken out after brief struggle and we eventually got as low as 92.62 before some recovery to 92.75 at writing.

EUR/CHF fell as low as 1.3997, taking out barrier option interest at 1.4000. That was quickly followed by large bid for 250 mln coming in at 1.4000/05. Given that earlier reports had SNB on the bid at 1.4005 we’ll take it that it was them. We’re presently at 1.4015,