- UK’s Darling imposes 50% tax on banker bonuses over GBP 25,000 to be paid by the bank
- Spain’s sovereign debt outlook lowered to negative by S&P
- UAE/Abu Dhabi gov’t-related entities placed on review by Moody’s
- Geithner extends TARP program until October
- S&P: UK debt outlook unchanged after pre-budget report (downgrade rumors swirled after speech)
- US sells $21 bln 10-year notes at 3.448%; bid-to-cover 2.62
- Kuwaiti oil minister: No need for OPEC output hike; $comfortable with $70-$80 oil
- ECB’s Draghi: European banks need to get ready for credit losses; regulation can’t avoid next crisis
- Citi to announce TARP payback tomorrow, raise equity capital: CNBC
- Gold falls as low as $1117, closes at $1127; Oil as low as $70.13; closes at $70.72; S&P 500 up 0.4%
Choppy trading with fairly wide ranges today as the market continues to shed risk. The unwinding is far from constant but comes in waves that move EUR/USD, emerging currencies and commodities in sync followed by periods when the pressure relents and prices rebound.
EUR/USD was in steady demand by sovereign names today. The BIS was seen on the bid at 1.4730-35 very early in US trade, Middle Eastern names in the 1.4750 and the BIS back around 1.4700 later in the morning. We dipped as low as 1.4672 in New York despite all the central bank buying, before recovering to end around 1.4730
GBP/USD initially rallied from about 1.6300 to 1.6377 as UK Chancellor Darling laid out his pre-budget report. The gains were short-lived and the pound fell as low as 1.6185 late in London. Fears that the UK’s sovereign debt rating could be in danger helped weigh on the pound but S&P calmed those jitters, saying the rating was not under review. GBP rallied on short-covering late in the session and ends at 1.6275.
USD/JPY was fixed in cement today, leaving EUR/JPY and GBP/JPY to swing in lockstep with the EUR/USD and Cable. It spent most of the session between 87.75 and 90.
CAD was oddly bid today despite weakness in commodities. Traders wonder whether there is some one-off flow like an M&A transaction supporting CAD. It ends at 1.0545> AUD and Kiwi rallied in the afternoon as the RBNZ announced it may begin removing monetary stimulus in the middle of 2010.
