- Greek FinMin discussing with EU/IMF how to fill a 3.8 bln gap in mid-term plan – Socialist MP
- BOJ’s Morimoto: Watching corporate bonds issued by power utilities because they have big presence in Japan corporate bond market
- Swiss trade balance 3306 mln in May
- French flash June manufacturing PMI 52.5
- German June flash manufacturing PMI 54.9
- Euro zone June flash manufacturing PMI 52.0
- Slovak PM: Greek PM, in phone call, said cannot guarantee reforms will find support in Greek parliament
- ECB’s Stark: Euro zone at point where more and more rescue measures would be fatal without financial system and economic policy adjustments
- Italy June consumer confidence index falls to 105.8 from 106.5 in May, but above median of 105.3
- Greek 5 year credit default swaps rise to 2025 bps
- UK mortgage approvals for home purchase 30,509 in May
- Finland PM: Risk of serious financial crisis, recession in Europe very high
- Irish Q1 GDP +1.3% q/q, +0.1% y/y
Risk aversion was back with a vengeance after Asia followed NY’s cue and Europe compounded the misery for the euro.
Euro opened weak and soon came under pressure. Asian sovereign bids were filled under 1.4300 and stops taken out through 1.4280 after a horrible French PMI. Real money accounts then joined in the selling spree to 1.4250, before a bounce to 1.4280/85. A wire headline revealing a 3.8bln euro hole in the Greek mid-term plan then sent euro into a skid again to 1.4219.
Cable also took a bath from early session highs of 1.6067 despite some Russian buying. Breach of the 200 day MA at 1.6031 accelerated the sell-off with UK clearer, US custody bank and ACB notable sellers.
A US investment bank then turned up buying aggressively just ahead of 1.6000, seemingly trying to protect option interest at said level. They never looked like stemming the tide and so it proved. Stops below 1.6000 further accelerated the sell-off and we’ve been as low as 1.5972 so far. Further stops now seen through 1.5950. Might be some through 1.5970 as well but don’t have confirmation of that.
Dollar picked up against the yen to 80.64 on some model account buys, but remains weighted by cross sales as EUR/JPY took out stops through 115.00 to 114.71.
Ozzie fell back with the euro, but felt some cushioning from a sharp rise in AUD/NZD to 1.2951 from earlier lows of 1.2910. Stops were tweaked in AUD/USD through 1.0520/25, after large bids around 1.0530 were filled. We got as low as 1.0510 before steadying.
Gold couldn’t avoid the rising dollar, falling around $10 to $1537, with WTI August crude also suffering from highs around $94.25 to $93.27. S&P futures fell around 5.25 to 1278.63
