• US retail sales fell 0.2% in May; better than expectations of a 0.5 slide
  • US PPI rises 0.2%/ex-food and energy +0.2%; slightly higher than expected
  • Finance ministers concede ECB has won battle over avoiding Greek credit event; looking for alternatives
  • ECB’s Draghi denies knowledge of Greek swaps with Goldman Sachs while employed by the firm
  • Eurogroup’s Juncker: All options on the table for Greece
  • Greek ruling party losses MP, majority shrinks to 5 votes
  • Fed’s Bernanke: Failure to raise debt ceiling could lead to severe disruptions to markets; urges fast action on debt and deficit
  • Finance ministers meeting breaks up in Brussels with no progress; another meeting scheduled for Sunday
  • S&P 500 rises 1.25% to 1288
  • US 10-year note yield soars after retail sales data, rise 12 bp to 3.10%
  • Gold rises $8 to $1525; oil rise $2 to $99.30

A choppy session in which EUR/USD was not the main focus. An oversold risk-on rally was the focus. Share prices popped strongly in AM trade as US retail were less-awful than feared. This helped spur further short-covering in EUR/CHF (which bottomed just above 1.2000 yesterday) which filtered through to EUR/USD, eventually.

EUR/USD actually fell in the immediate wake of the US data, triggering stops below 1.4425. Once those were done, we traded pretty much straight up from there, reaching 1.4498 at mid-afternoon as stocks rallied better than 1.5% at their best. EUR/CHF broke north as well, triggering stops above 1.2150, rallying ll the way 1.2256 before relenting. Major topside stops are eyed above the 1.2325 level in that cross. If triggered, traders think a medium-term bottom for EUR/CHF will be in place.

USD/JPY rallied on the firmer US yields but ran into sellers on the approach of offers at the 80. 70 level. 80.64 was reached even before cash equity markets opened and we never failed up there on a second attempt in the afternoon.

EUR/USD remains underpinned by improved risk appetite on the one-hand but constrained by lingering Greek debt concerns. Today it became clear that the ECB has won the battle to avoid a credit event but EU ministers have no earthly idea how to include private creditors without sparking a credit event. They will meet again Sunday to try and make fresh progress.

Commodity currencies benefited from the Chinese data overnight and the US data today, it should come as no surprise. AUD ends at 1.0675 after peaking at 1.0715 earlier this afternoon.