- OECD chief economist Paddan: Euro has been overvalued for too long – Le Figaro
- Merkel: Will do all we can for a strong euro
- Germany’s Finance Agency sells 5.445 bln euros in top up of 2.25% 5 yr Bobl notes. Bid cover ratio anemic 1.1
- German Finance Agency: Bobl auction took place in very volatile market conditions. Demand for German sovereign bonds is unbroken across all maturities
- German FinMin to discuss financial markets with US. Treasury Secretary Geithner Thursday. To hold news conference Thursday (10:00 GMT) We want to counter speculation, calm markets – Spokesman
- German Gfk June consumer sentiment indicator down at 3.5 from downwardly revised 3.7 in May (prev 3.8), weaker than median forecast of 3.6
- Clinton: U.S. will stand with South Korea “in this difficult hour”
- French May overall business morale 96, unchanged from April – INSEE
- Spain’s PM: Tax hikes for high earners in “next few weeks”
- ECB’s Noyer: Recent central bank intervention on markets does not point to new policy, measures must remain exceptional
- ECB’s Liikanen: Signs the financial system has started to slowly recover.
- UK mortgage approvals for home purchase 35,729 in April from 35,044 in May, weaker than median forecast of 37,000
- EU Commission: Wants new framework to give states tools for cooordinated action on bank failures
Only thing I can conclude from this morning’s trade is that market seems happy to try and test SNB’s resolve. EUR/CHF down at 1.4200 from early 1.4280 having been as low as 1.4177.
Risk sentiment hasn’t been too bad, stocks and oil up, FTSE 100 and DAX up around 2%, oil up 2 bucks.
EUR/USD marginally firmer at 1.2325 from early 1.2310. Ran into trouble early, Asian sovereign seen notable seller. The ACB in question was also decent seller of AUD/USD as well. EUR/USD fell through 1.2300 on way to session low 1.2263, not helped by comments from OECD’s Paddan (see above)
Talk of buy orders down at 1.2250/60, said to include sovereign orders, lent support and buying from Russia and a large US bank helped the pairing back over 1.2300. The move came as European stocks extended their early gains.
The rally extended before Middle Eastern selling above 1.2335 and news of a weak German bond auction helped cap the upside.
Cable marginally firmer, up at 1.4420 from early 1.4390. Things started off badly though with the pairing posting 1.4333 session low amid talk of decent Middle Eastern selling. A US investment bank stepped in and sold the EUR/GBP cross around .8560 and this helped lend cable some support. The cross is presently down at .8545. Extension of European stock rally helped cable extend recovery.
USD/JPY at 90.30 effectively unchanged on the day.