- Merkel: Euro is in danger
- Ex BOJ board member Mizuno: Expects German short selling ban to increase euro selling. There is risk of further rise in yen. Does not think Japan authorities will act on yen rise vs euro
- France’s Lagarde: France not considering ban on naked short selling in European debt, unlike Germany. Regrets unilateral decision by Germany on naked short selling
- ECB’s Weber: Greek aid package puts severe strain on institutional framework of euro zone
- German FinMin: We haven’t convinced the markets yet, we must reduce deficits. We expect Greece to pay back it’s debts
- BOE minutes: MPC voted 9-0 to keep rates at 0.5%, leave QE at 200 bln
European stocks have had bad morning (DAX 30 and FTSE 100 off around 2%), oil off about a buck, the market unprepared to embrace risk at the present time. Against this backdrop yen has seen across the board gains. Comments from ex-BOJ offficial Mizuno (see above) were noted early and helped set the tone. EUR/JPY down at 111.15 from early 112.20 having been as low as 110.87. Despite aforementioned comments there have been mutterings of Kampo interest down around 111.00.
EUR/USD sits at 1.2205 all but unchanged, trading confined to a fairly narrow range around 1.2200. China and Russia have both been notable buyers on dips today helping lend much-needed support. Talk of ongoing hedge fund selling into rallies over 1.2200.
Pairing got to 1.2220’s after China came in buying around 1.2185 only for Angela Merkel to stop the rally in it’s tracks with her “euro is in danger” comment.
USD/JPY down at 91.20 from early 92.00 as the yen benefits from ongoing risk aversion.
No respite for aussie dollar, AUD/USD down at .8425 from early .8550, the sell-off accelerating when stops through psychological .8500 tripped.
EUR/CHF sits unchanged at 1.4005 but SNB has had to absorb huge selling pressure.
Cable down at 1.4260 from early 1.4290. Things had looked quite promising early as pairing moved back over 1.4300 and tripped stops through 1.4350 on way to session high 1.4371.
A well regarded large European corporate came in buying decent amounts of EUR/GBP around .8500 and this has helped pressure cable. The cross is back up at .8550 having very briefly touched .8493.