- Italy announces details of its austerity measures
- Irish PM warns of tough budget to come
- Merkel and Sarkozy meeting again today in attempt to make progress on fiscal union
- ECB looking likely to support more large intervention in Sovereign bonds if EU budget rules are toughened
- Non-manufacturing Chinese PMI falls heavily
- HSBC November China services PMI slips to 52.5 from 54.1
- Australian TD-MI inflation gauge -0.1% MoM
- Equity markets slightly positive on average
- Gold $1751/0z; Oil $101/bbl
EUR/USD saw some mild volatility in early interbank trade but has stagnated near 1.3410 for the last 5 hours. The pair opened a little lower than its NY closing levels near 1.3400 but rallied on the announcement of the Italian austerity measures. There were various rumours floating around regarding the Merkel-Sarkozy meeting today, possible implications for ECB intervention and also how the IMF may become involved. Nothing could move the market. Ranges: Interbank 1.3378/1.3438, otherwise 1.3396/1.3435
AUD/USD also had a quiet day, ignoring both the weekend Chinese data and todays HSBC numbers. The market is in hold ahead of tomorrow’s RBA decision where a slight majority seems to favour a 25bps rate cut although I will again disagree as I feel the crisis in the EU will be enough to encourage Glenn Stevens to wait until February. Ranges: 1.0206/66
USD/JPY 77.89/78.10; Cable 1.5587/1.5631; USD/CHF .9196/.9226