- Media reports state EU, IMF and US Treasury drawing up liquidity plan for Spain. EU Commission comes out and denies report
- Spain/German 10-year government bond yield spread widens to 222 bps, euro lifetime high
- Bank of Spain: Calls for fiscal consolidation. Signs of recovery in Spanish economy still very weak
- ECB’s Gonzalez Paramo: Financial markets in “quite perculiar” mood, has nothing to do with Spain specifically
- French govt proposes gradually raising minimum retirement age to 62 from 60
- IMF chief economist: It is in China’s interest to revalue yuan
- UK May claimant counts -30,900, better than median forecast of -20,000
- Swiss ZEW investor sentiment falls sharply to 17.5 in June from 40.5 in May
- Euro zone May inflation confirmed at +0.1% m/m, +1.6% y/y
- ECB’s Noyer: Europe and China currencies will in future play key international role alongside dollar
- ECB’s Quaden: Modest economic recovery underway in euro zone. Global growth driven by India, China, Brazil
- ECB’s Stark: Sees no inflation risk in next 2 years
- ECB’s Gonzalez Paramo: Over next few years the euro area banking sector will face large funding needs
Not too much net change on the morning, euro marginally weaker as concerns over Spain grow.
EUR/USD down at 1.2280 from early 1.2315. Early rally ran into decent sell interest at 1.2350/55 and it’s been downhill ever since, albeit in rather choppy fashion. We’re been as low as 1.2274 so far. EUR/JPY down at 112.40 from early 112.70.
Cable at 1.4805, effectively unchanged on day. Ran into bout of heavy selling which took us down to 1.4752 session low, but better than expected UK jobs report helped provide decent support.
Some caution though surrounds Mervyn King’s Mansion House speech tonight (19:45 GMT/20:45 BST) The Governor of the Bank of England has a habit of underminning sterling when he speaks. EUR/GBP marginally lower at .8298 from early .8315.
USD/JPY at 91.50 unchanged on the day.
