- After the big sell-off overnight based on the downgrades of Greece and Portugal, JPY crosses have based and are bouncing back strongly
- Reports that the IMF are considering an extra EUR 10 billion in aid to Greece helped turn sentiment
- Australian CPI was slightly higher than expected at 0.9% QoQ, increasing expectation of a rate rise next week
- China takes further measures to slow down the rise in property prices
- Japan’s retail sales +4.7% YoY, the largest rise in 13 years
- RBA’s Debelle: Euro’s Sovereign debt woes have had no impact on Australia
- Nikkei falls by 2.5%, other regional bourses by 1.5%
The JPY crosses have bounced back strongly during the Asian session despite further falls in regional equity markets.
AUD/JPY closed in NY around 85.00 and has bounced over 100 pips. AUD/USD bids close to .9135 (reportedly Chinese) helped keep stops below .9130 safe and with the market short we have seen a gradual squeeze higher throughout the session. The slightly higher than expected CPI number has renewed talk of a 25 bps rate rise next week. Moves by China to deflate it’s growing property bubble were also seen as good for longer term stability and therefore good for the Aussie. Range: .9135/.9230
USD/JPY fell in early trade when the JPY crosses were under pressure but has since rebounded modestly. Bids are noted at 92.70. Range 93.00/35
EUR/JPY was unable to break below some solid bids between 122.40/50 and has bounced strongly on heavy short covering inspired by the FT article on Greece/IMF. Range: 122.46/123.32
EUR/USD has ground it’s way back above 1.3200, primarily on EUR/JPY demand. Range: 1.3155/1.3217
Cable has lagged the EUR/USD slightly as buying interest in EUR/GBP around .8600 encouraged short covering. Ranges: cable 1.5238/88; EUR/GBP .8630/53
Markets: Nikkei -2.5%, HK -1.15%, Kospi -1%, Shanghai -0.5%. Gold -$3 at $1166/oz.