- German, Spain, Netherlands approve Greek bailout funding
- US nonfarm payrolls rise 290,000, unemployment rate rises to 9.9% in April; upward revisions to Feb and Mar add 190,000 jobs
- No progress on forming UK government as horsetrading begins
- No public comment after G7 conference call
- Strong rumors of ECB funding package for banks over weekend
- EU summit to strengthen budget rules, perhaps reopen treaty
- US consumer credit rises $1.95 bln in March
- S&P 500 falls 1.5%, US 2-yr note rises 2 bp in yield to 0.82% , 10-yr note 1 bp to 3.41%
- oil falls a further $2 to $75.10; gold ends at $1210
EUR/USD traded in choppy fashion but moves were far less violent than those seen Thursday. Liquidity was very poor, a fraction of normal, traders reported, with banks concerned about the strength and soundness of market counterparties.
Solid sell of EUR/USD was seen from several Latin American central banks was seen this morning, helping set the stage for a slide to the 1.2610 level from around 1.2750 during the New York morning. The persistence of the selling suggests LatAm nations are shedding some of the euro reserves they have built up in recent years, a very ominous sign for the euro if that trend is replicated by reserve managers around the globe.
Hopes for a fresh dose of liquidity for European banks from the ECB over the weekend helped calm financial jitters a touch during the New York afternoon.
USD/JPY rallied to 93.27 in the aftermath of positive US employment data. Prices were belted about 100 pips lower moments later as stale longs took advantage of the bounce to offload long dollar positions. We eventually fell as low as 90.83 during the NY morning before stabilizing (relatively speaking) in a 91.00/92.00 range.
Cable was quite volatile but ended well off its lows on hopes that the Tories will be able to form a government without giving away the store on fiscal policy. Cable bottomed several times near 1.4650 in New York and ended near its firmest levels of the post-election period, at around 1.4815/20
AUD and CAD traded in choppy ranges today, consolidating Thursday’s losses. They will need stability in global markets before making any sort of sustained recovery next week.
