- PBOC advisor Li Daokui: Yuan likely to rise about 3% vs dlr by end-2010 if euro steadies
- Greek 5-year cds hits record high of 958 bps vs 934 bps in New York Wednesday. Risk of Greek sovereign default within 5 years at 56.5% says CMA datavision
- Europe: Adrift amid the rift. FT examines the relationship between Berlin and Paris
- Merkel rejects Obama’s call to spend. Warns Europe’s crisis is far from over – WSJ interview
- ECB’s Trichet: Idea that austerity measures could trigger stagnation is incorrect
- French May consumer spending +0.7% m/m vs median forecast of +0.4%
- Euro zone industrial orders +0.9% m/m, +22.1% vs median forecasts +1.6%, +21.5% respectively
European stocks started out firmer before experiencing a marked reversal of fortunes. Risk aversion to the fore with yen, swissy, dollar beneficiaries.
EUR/USD started around 1.2330 and quickly came under pressure, BIS noted seller around the highs. Stops through 1.2290 were eventually tripped and we got down to session low 1.2263. Sources noted BIS back in market, this time buying around 1.2270 and we’ve edged a little higher, presently at 1.2285.
Cable marginally easier on day, down at 1.4965 from early 1.4985. The pairing has run into good interest to sell above the psychological 1.5000 line, topping out at 1.5010. Talk of sell orders gathered up at 1.5020/30 with stops just above there.
EUR/GBP lower on the day. Barrier option interest at .8200 was taken out and a session low .8185 posted before mild recovery, presently at .8205. Recent budget and split rate decision at last MPC meet continue to underpin sterling.
USD/JPY down at 89.45 from early 89.85, the yen benefitting from the Fed’s dovish monetary stance and heightened risk aversion.
EUR/CHF lower again, down at 1.3565 from early 1.3615 with SNB staying at home once again.
