• German FinMin Schaeuble: Upcoming euro zone summit won’t present a final solution for euro zone debt crisis
  • Merkel spokesman Siebert: Search for a crisis solution may last until 2012. Germany, France want financial transaction tax
  • IIF chief :Banks will look at revising Greek bailout deal only as part of broad package to address EU sovereign crisis. Private sector will discuss Greek deal only as part of “open transparent discussion” on Greek economy, debt
  • German govt spokesman: Merkel has no firm plans to meet top bankers ahead of the EU summit
  • Japan govt downgrades economic assessment in October for first time in 6 months
  • Bundesbank monthly report: Economic recovery in Germany continued in Q3. But economic outlook for Q4 2011 and Q1 2012 has deteriorated further
  • Canada FinMin Flaherty: Private sector involvement in Greece will probably need to be more than 21% (yer think)
  • Dutch FinMin Jager: Euro zone rules must be strengthened to enforce economic reforms, not just maintainence of fiscal rules

Extremely busy for a Monday morning. Risk on bigtime…….whoops…..not so much.

EUR/USD down at 1.3795 from early 1.3845 having earlier rallied strongly to 1.3915. European stocks opened sharply firmer and built on early gains. This helped propel EUR/USD higher and eventually well-documented 1.3900 barrier interest was taken out. Buy stops were tripped through 1.3905 and we got as high as 1.3914 where we rather dramatically topped out.

BIS stepped into the market and was a notable seller above 1.3905. Then comments from Schaeuble and and Siebert (see above) helped send the single currency into a tailspin.

Trailing sell stops through 1.3850 were the first to go accelerating the slide, and then more stops through 1.3820/1.3825 (reports of both, take your pick) inflicted further damage. Crazy shit…….

USD/JPY unchanged on the day at 77.25. We did however see a little price action when risk on buying of the EUR/JPY cross managed to get USD/JPY to 77.45. US investment bank. model funds were notable sellers of the yen during these moves.

Barrier option interest is well-documented up at 77.50 and defensive selling ahead of said level was given a helping hand as general risk appetite diminished sharply. Talk of buy stops through 77.60 if we ever manage to get through 77.50.

Cable easier at 1.5745 from early 1.5790, an early having topped out at 1.5848. EUR/GBP little changed at .8760. Early rally in the cross topped out at .8797, just shy of decent-sized buy stops just above .8800.

AUD/USD effectively unchanged at 1.0290. Early rally stalled around 1.0345/55 as two sovereigns and “black box” sellers stepped into the market. It really looked like that might be the top, at least for the short-term (well it did to me). But a major US commercial bank then stepped in buying decent amounts giving the pairing a final push up to 1.0371 before the subsequent slump.