- Greek and European officials signal bailout deal likely on Monday
- ECB swaps Greek bonds with collective action clause for ones without
- ECB move seen as precursor to PSI deal which could begin Wed
- Greece finds extra budget savings
- Short-term bridge loan for Greece off the table
- Swiss econ minister: Franc overvalued “but things are the way they are”
- Primary dealers see diminished chance of QE3
- Philly Fed +10.2 vs +8.4 exp
- Initial jobless claims 348K vs 364K exp
- US PPI +0.1% vs +0.3%
- Core PPI +0.4% vs +0.1% exp
- Bernanke sees some improvements
- GBP leads, JPY lags
- S&P 500 closes up 1.1% to 1358
When the market knocked the euro below 1.30 in early US trading there was considerable confusion about Greece. There was talk about delaying bailout payments and rumors about kicking Greece out. That speculation took a step back as the ECB took the first steps in the debt swap and officials nearly confirmed a bailout on Monday. In response, EUR/USD punched through stops to 1.3120 where it stalled early in the US afternoon before kicking toward sessin highs at 1.3150 at the end of the day.
USD/JPY continues to march higher. Bernanke acknowledged economic improvement as data continued to turn higher. At the moment, the pair is ranging between 78.75 and 79.00 and unable to break either way.
Cable followed the euro-led script, busting out of the recent 1.5660 to 1.5735 range and squeezing above 1.58.
Gold slumped to $1705, matching last week’s low, but it rebounded to unchanged on the day at $1727 on economic optimism.
