• Swiss June retail sales up 0.9% y/y
  • Bomb blast at police HQ in Russia’s ingushetia region kills 19, wounds 60 – Local interior ministry
  • Euro zone June trade surplus 4.6 bln euros vs 2.1 bln surplus in May
  • 54 people missing. 8 dead after accident at Russian hydroelectric power station

Little or nothing in the way of news this morning, but it’s sure been an active little session. Risk is about as “off” as you can get, with global stockmarkets in full slump mode. At writing S&P futures are off a very hefty 21 points.

There’s been no one trigger. Rather investors had been growing fidgety of late given the extended valuations. A few factors are being mentioned though, last Friday’s weak US consumer confidence data; the closing of 5 U.S. lenders last week by regulators; and the sharp share losses being seen in the Chinese markets to the fore.

EUR/USD started out around 1.4155 and was under pressure early, following stocks lower. Well-touted buy orders in the 1.4100/10 area (including Asian sovereign interest) lent much needed support for a while, and we saw an initial bounce from 1.4108 to the 1.4125/30 area.

This proved only a temporary reprieve though, as the stockmarket selling just kept on coming. Finally the buy interest at 1.4100/10 was brushed aside and sell stops below 1.4090 triggered. We’ve been to a session low 1.4051 so far, presently at 1.4060.

Cable got hit hard and often this morning. Sterling has been underminned by the rising risk aversion, poor Rightmove housing data and growing worries political interference to limit bankers compensation could seriously undermine the City’s standing as a leading financial centre. Obviously budgeoning government debt/ QE remain ongoing negatives.

Having started off around 1.6450 we’ve been as low as 1.6277, presently at 1.6285. Middle Eastern names, who have been decent buyers on dips recently, have today turned round and have been selling very aggressively.

EUR/GBP is up on the day, presently at .8635 from an early .8605. Sources note sell orders up at .8640 up through .8650 and they have just about managed to cap the topside, so far.

USD/JPY sits at 94.60, effectively unchanged on the day, trading having been confined to an extremely narrow range. Sell stops noted in 94.35 area.