- Artillery shells fired by North Korea hit South Korean island, fatalities
- S.Korea says it was conducting military drill in area before North Korea firing. Says conducted test firing before exchange at island, but fired West, not North
- German FinMin Schaeble: Joint currency is at stake
- Euro zone manufacturing PMI 55.5, stronger than median forecast of 54.4
- EU, ECB, IMF: Greece agreed new measures to broaden tax base, cut health sector and state firm waste
- IMFmission chief for Greece: Athens broadly on track on fiscal plan
- Greece’s main labour union calls for pan-european anti-austerity strike in 2011 – Union spokesman
- Portugal opposition lawmaker says to allow passage of 2011 budget
- German Q3 GDP (final) +0.7% q/q, +3.9% y/y, as expected
- Irish c.bank governor: Not certain all of bailout package will be drawn down. There will a lot of conditions attached to the bailout
- Bank of Spain’s Ordonez: Economy will take time to create jobs, recovery will be soft
- Bank of Spain’s Ordonez: Spain’s deficit cutting plans more serious than some other countries
- Italy November consumer confidence 108.5, stronger than median forecast of 107.5
- French November manufacturing industry business morale 100, weaker than median forecast of 102
- UK October mortgage approvals for home purchase 30,766, down from 31,058 in September, lowest since March 2009
- ECB’s Tumpel-Gugerell: Money market conditions in euro zone are improving
The title of this wrap is a very old naval exclamation of annoyance/frustration. Given the extreme choppiness of price action this morning, it’s probably a rather apt title methinks.
At the end of the morning EUR/USD sits at 1.3580, all but unchanged on the day. News that North Korea had fired on a South Korean island saw EUR/USD dip sharply in very early European trade as risk aversion spiked. We got as low as 1.3527 before recovery.
Asian and Middle Eastern sovereign buying has been noted this morning, lending the pairing support. We also had some decent European PMI data which will have helped.
Talk of buy orders now clustered 1.3500/20, stops below. On topside, buy stops seen through 1.3605.
USD/JPY at 83.38, unchanged on the day. We did see a kneejerk rally in the wake of the Korean news (JPY normally weakens on bad news from the Korean peninsula, given Japan’s proximity to the area.) We got as high as 83.85.
Trouble is the Korean news spiked risk aversion causing US treasury yields to fall. Lower treasury yields then subsequently weighed on the USD/JPY.
Talk of Asian buy orders clustered down at 83.10/20.
Cable at 1.5930, all but unchanged as well. EUR/GBP also unchanged around .8525, recovering from session low .8507 as UK clearer came in and bought decent amounts.
AUD/USD lower on day at .9825 from early .9855, although off session low of .9777. Asian sovereign and BIS notable buyers under .9800.
