- Soc Gen says its exposure to sovereign debt of euro zone peripheral euro zone countries is small
- Swiss Govt: Country has to accept challenge of strong franc
- SNB’s Jordan: Definitely still possible that euro zone problems can be solved
- SNB’s Danthine: Current situation can’t continue indefinitely, any overvalued currency has tendency to return to fair value
- SNB’s Jordan: Franc exchange rate is extreme
- S&P: US, France indebtedness ratios similar, but fiscal flows better in France, deficit not as high
- Fitch downgrades Cyprus to BBB, outlook negative
- EIA weekly crude stocks down 5.2 mmbls to 349.8 mmbls
- Italy EconMin Tremonti (he still around?): Told meeting 2011 deficit/GDP ratio will be 3.8%
- Norges Bank keep rates unchanged at 2.25%
- Unicredit joins Intesa San Paolo in share suspension after a 7% fall
- Fitch Ratings says France is rated AAA with stable outlook
- US June wholesale inventories +0.6% (exp +1.0%) vs May +1.7% (prev +1.8%)
- Moody’s: US debt ceiling agreement to yield $0.5 trillion or more in defense budget cuts
- White House: Obama expects members of Congressional Special Committee to act seriously to tackle U.S. deficit
- US 2011 July Budget deficit $129.4 bln vs $165 bln year ago
Another volatile day with stocks falling from the NY opening bell on Wall Street as risk aversion crept back again.
EUR/USD was pressed lower from the start as rumours circulated of a France sovereign downgrade. French bank stocks were whacked hard amid various spurious rumours with EUR/USD hitting bids around 1.4320 and 1.4300 to 1.4270.
Another wave of selling from the leverage brigade pushed it under 1.4200 despite Fitch and Moody’s stating France’s rating was AAA and stable. 1.4162 was the low just after Wall street opened, but late comments from Societe Generale (after it’s stock was fried) led a bounce back to $1.4235/40. (see headline above)
USD/JPY carries on taunting the BOJ/MOF with its ‘dead cat ‘ bounces, trading 76.35-85, but failed to bring about any further warnings from officials. Real money sellers were behind the push to the lows. Some players expecting intervention in Asia tomorrow.
Traders are wary of triggering stops placed under 76.25, especially with order boards apparently fairly empty at the moment. EUR/JPY fell through the Aug 1 lows around 108.70 to 108.31, picking up later towards 109.30 with the EUR/USD.
Cable traded 1.6124-6256, with some london fixing selling interest helping the EUR/GBP to bounce from lows of 0.8760. The cross collapsed from 0.8844 earlier as the France downgrade rumour hit the bush telegraph.
EUR/CHF calmed down after the morning exertions trading a 1.0258-1.0456. Further comments from officials (see above) failed to extend the morning rally to 1.0525 following the SNB liquidity addition to money markets this morning.
AUD/USD ranged 1.0168-1.0344 in the session falling with the EUR/USD on the France downgrade rumour, later recovering to 1.0290. Bids are sitting under the lows at 1.0140/45.
Gold took advantage of the euro misery hitting yet another life time high of $1800 on the Comex futures and $1798 on the spot.
WTI Crude Oil hit lows of $79.73, but picked up on the EIA data (see above) with a rally to $83.11
Equities gave back most of the gains booked yesterday, with the Dow down just under 3.7%, S&P down 3.1% and Nasdaq down around 2.9%
