- French Budget Minister: France’s AAA rating “could be a stretch”
- ECB: Euro zone banks facing second wave of losses
- U.S. to push Europe on stress tests – WSJ
- AIG rejects Prudential’s new proposed offer for AIA
- Swiss Q1 GDP +0.4% q/q, +2.2% y/y compared to median forecasts +0.6%, +1.7% respectively
- German April retail sales +1.0% m/m, -3.1% y/y compared to median forecasts +0.9%, -1.4% respectively
- French April producer prices +1.0% m/m, stronger than median forecast of +0.5%
- German May (s.a) jobless total falls 45k m/m, better than median forecast of a 20k fall. Unemployment rate 7.7%, better than median forecast of 7.8%
- Euro zone May manufacturing PMI 55.8, slightly lower than flash estimate of 55.9
- UK May manufacturing PMI 58.0, slightly better than median forecast of 57.8, unchanged from April’s 15-year high
- Euro zone April unemployment 10.1%, up from 10.0% in March, highest rate since June 1998
European stocks down sharply (FTSE and DAX around 2%), oil off around 2 bucks. Worries over health of euro zone banks, worries over France’s AAA rating, worries over China’s growth, worries over BP oil spill. WORRIES, too many to mention.
EUR/USD down at 1.2135 from early 1.2260. Stops tripped through 1.2220, 1.2200 and 1.2150 on way to session low 1.2112. It wasn’t one-way traffic, but not too far off. Early rumour of iminent French downgrade (no doubt prompted by comments from French Budget Minister, see above) set the tone.
Cable at 1.4500, little firmer from early 1.4475. Dip to session low 1.4440 saw UK real money interest emerge lending support. On topside, sell orders noted at 1.4540/50, stops just above there. DOwnside stops noted through 1.4430.
USD/JPY at 90.95 effectively unchanged on day, hostage to cross moves.
