• Moody’s places Spain’s AA2 ratings on review
  • Moody’s downgrades ratings of six Spanish regions
  • Moody’s revision relies heavily on short term market developments- Treasury letter to investors
  • Bk of Spain: Spain May current account -3.556bln euros vs -3.36bln in April
  • Euro zone July inflation estimated at 2.5% y/y (consensus +2.7%) vs 2.7% in June
  • UK June consumer credit +0.4 bln stg vs May +0.3 bln (consensus +0.3 bln)
  • German June real sa retail sales +6.3%m/m, -1.0%y/y
  • France June PPI -0.1%m/m, +6.1% y/y
  • SNB reporting loss of CHF10 billion on foreign currency positions
  • Portugal PM says Europe in conditions today to safeguard itself better from crisis. No margin for doubt about effort on spending cuts.
  • Greek June PPI inflation 6.6%y/y vs 7.3% in May
  • Greek May retail sales -10.9% y/y after 8.8% drop in April
  • Italy July preliminary CPI (NIC index) +0.3% m/m, +2.7% y/y
  • Irish Central bank: Uncertainty around global growth outlook remains elevated, risks tilted to downside
  • EFSF might not be ready to lend Greece next loan tranche by Mid-September.

EUR/USD hit the skids this morning with an announcement just before the European open that Moody was placing Spain’s AA2 ratings on review falling from 1.4340 through stops at 1.4280 . The move appeared to balance around $1.4255/65 bouncing back to 1.4305 on strong German retail sales before falling back again.

The announcement from DJ that ‘ EFSF might not be ready to lend Greece next loan tranche by Mid-September’ later sent Euro tumbling through 1.4240 stops to 1.4230, before a recovery to 1.4250

Cable was dragged down with the euro falling to 1.6340 through 1.6290/95 stops to 1.6265, in thin trading conditions

USD/JPY traded a 77.45-67 range having taken out a 77.50 barrier in Asia. Further barriers are noted at 77.25 and 77.00.

EUR/JPY plummeted with EUR/USD to lows of 110.52 from highs of 111.02

USD/CHF failed to bounce out of the 0.7996-0.8023 range, but the downside continues to hold barrier protection ahead of 0.7990 from a major NY bank

AUD/USD was clumped again with sales from real money accounts after earlier losses in Asia from cross sales, hitting lows of 1.0924 from Europe session highs of 1.0967.

Gold and WTI crude were largely forgotten trading around $1614 and $96.80