• S.Korean authorities seen buying dollars to stem won’s rise – dealers
  • Prudential: Discussions regarding current status of AIA transaction have taken place between Prudential and AIG and are continuing. May or may not lead to a change in terms of deal
  • Greek EconMin: Will not restructure debt. Will restore market confidence
  • EU Commission: Spanish austerity plan step in right direction
  • Spain unions say bilateral labour reform talks have ended without success. Unions, business leaders to talk with government on labour reforms this weekend – Spokesman
  • Swiss KOF leading indicator 2.16 in May, better than median forecast of 2.03
  • China FinMin: Sovereign debt issues in Europe to affect global economic recovery
  • ECB’s Bini Smaghi: Euro zone problems are early warning alarm of the challenges others are going to face

EUR/USD up at 1.2410 from early 1.2300, having been as high as 1.2452. The rally started early but faltered when Asian sovereign stepped in and sold around 1.2360 level. This proved a temporary setback as a German name came in buying very aggressively (said to have bought 2 yards). Stops noted through 1.2395 were tripped causing price to spike quickly to 1.2420/30 area on way to session high 1.2452.

There had been much talk of China sitting on the offer up around 1.2450 and so it panned out. The BIS then stepped in selling in 1.2420/30 area extending the move lower.

Cable is up on the day, presently at 1.4580 from early 1.4540. It’s been choppy though and certainly not for the faint hearted. Friday before a long weekend, one can only imagine how illiquid the cable market is. At one stage cable slumped to session low 1.4493 before recovery. Talk of stops through 1.4610 before sell orders at 1.4640/50. Talk of more stops just above there.

EUR/GBP up at .8510 from early .8455, having been as high as .8536 at one stage. Cross underpinned by usual month-end European central bank buying (related to UK payment to EU)

USD/JPY little changed at 91.15. Early rally on back of decent EUR/JPY buying ran into sell orders in 91.40/50 area, topping out at 91.41.