• Poor Italian auctions
  • Italian sa retail sales fall 0.4% m/m, -1.6% unadj y/y .From-0.1%m/m in August , on food and non food sales
  • French Nov consumer confidence falls to 79 from 82 in Oct
  • German Oct Import prices -0.3%m/m, +6.8% y/y
  • ECB’s Coene: Further rate cut probable if current trends continue
  • ECB’s/ Bk of Italy’s Gov Visco: Austerity measures by previous govt insufficient
  • EU’s Rehn: Looks like contagion has spread to core countries

So much for a quiet friday .. The 1.3300 barrier in EUR/USD came under attack in early Europe with some ferocious selling apparently from a Scandinavian corporate amongst others, which took out some very large bids at 1.3300 and 1.3295 from the BIS and some large US banks.

Sell stops went off through 1.3290 and we collapsed towards the next barrier at 1.3250. That also gave way after weak Italian auctions and a record all time yield for the 2 yr CTZ’s, to a low of 1.3225. ECB buying Italian bonds through the SMP failed to halt the tide.

GBP/USD was left behind hitting early highs of 1.5485 before leveraged sellers slapped cable to a brief low of 1.5423. Heavy EUR/GBP selling then led a collapse from 0.8611 to 0.8558, and cable subsequently rallied back to 1.5470/75. Offers are left up at 1.5480/85. Sell stops await a move down through 1.5390.

USD/JPY was quiet again through 77.33-50, but EUR/JPY collapsed from 103.08 to 102.49

USD/CHF marched higher on the back of the Euro collapse taking out a 0.9250 barrier (from 0.9217 lows) to 0.9269.

AUD/USD found stroing corporate demand from 0.9670 and some early buys from an Asian sovereign but so far has failed to rally back through the 0.9715/20 highs in Asia. Range 0.9667-0.9718.

Gold was down almost $15 from 1687, with January WTI off around 80 cents from 96.44

European bourses all fell between 0..5-2.0%. with Italys’s MIB FTSE the worst performer, down almost 2%