• Chinese stocks get hit very hard
  • French June producer prices +0.6% m/m, -8,7% y/y, vs median forecasts of -0.1%, -8.6% – INSEE
  • Spain June calendar-adjusted retail sales -4.3% vs -6.3% in May – INE
  • Italy July business confidence rises to 71.7 from revised 69.8 in June, better than median forecast of 70.0. Highest read since November 2008
  • UK June mortgage approvals 47,584 vs 44,169 in May, in line with median forecast of 47,000. Mortgage lending £0.343 bln, lower than median forecast of £0.6 bln
  • German ifo survey shows firms find bank lending slightly more restrictive in July vs June
  • SNB’s Jordan: SNB will continue to intervene to fight a rise in the franc vs the euro, if needed. Interventions have been effective so far

The USD has made some ground this morning, but is generally off best levels. S&P futures fell over 10 points in early European trading, spooked by the very hefty losses seen in Chinese stocks, with both the Shanghai and Hong Kong exchanges posting big declines. Risk appetite got hit hard, although there has been some recovery. S&P futures are currently off only 3 points.

EUR/USD started around 1.4170 and was on the backfoot early. China was supposed to be lying in wait down at 1.4130/40, but when they didn’t materialise stops just under 1.4130 were triggered. We saw a session low 1.4111 posted. Middle East and Russia were notable sellers.

As has been the way, when China does a moonlight flit they don’t tend to stray very far and they subsequently turned up buying in the 1.4110/20 area. We’ve never been back to revisit said level and sit at 1.4155 at writing. Sell orders noted up at 1.4190/00, ahead of 1.4200 option expiries.

Cable got hit hard early as general risk sentiment got hit. Having started around 1.6435, the sell-off accelerated when stops below 1.6400 and 1.6380 were triggered in quick succession as S&P futures slumped.

Sources reported buy orders lying in wait down at 1.6350/60 and they’ve managed to soak up two heavy bouts of selling. Can’t find out any of the names buying, but they certainly must has absorbed some decent-sized supply. We’ve subsequently bounced back, presently at 1.6385.

USD/JPY has ticked higher, presently up at 94.75 from an early 94.30. There have been reports China bought overnight in Asia down at 94.00/10.