- Troika inspectors approve new aid tranche to Greece
- If EFSF not passed, will unleash a crisis worse than Lehman: Slovak finmin
- EU commission to offer bank recapitalization plan on Wednesday
- German finance ministry spokesman says decision on Greek aid “still open”
- BOE’s Posen: Pleased with BOE QE vote; could do more, if needed
- Trichet: ECB has remained faithful to mandate; up to govts to leverage EFSF
- S&P downgrades Spanish banks to Group 4 from Group 3
- Fitch downgrades Spain’s Banco Santander
- European banks to have 6-9 months to meet tougher capital requirements: FT
- Dow Jones: Greek haircuts may be 40-60%; IMF, EU to take same hit?
- Obama jobs bill set to die in Senate tonight; China currency bill set for a vote
- S&P 500 rises .1% to 1196
- US 10 year note rises 8 bp after Monday holiday. Yield 2.16%
- WTI falls $0.25 to $85.15; gold falls $10 to $1666
EUR/USD lost ground in early US trade, slipping to briefly below 1.3570 before sovereign bids helped chase prices higher. A recovery of overnight losses in US equity futures helped spark a further rebound within the range in EUR/USD as did signs that while Slovakia may reject the EFSF in today’s vote of confidence, a caretaker government is expected to pass the expansion later this week.
Bottom line, it still appears that the 1.3700 barrier tested on Monday is the most important near-term influence on the market. The barrier is being protected on rallies and pullbacks are being bought by those protecting the barrier. In other words, markets are returning to more normal conditions, at long last.
With a slate of EU and G20 summits to come, volatility is sure to return, so enjoy the respite, while it lasts.
