Further consolidation while we await more direction has been the order of the day;
The market tested the resolve of bids at USD/JPY 87.00 as the risk pairs traded down only to rebound somewhat at the time of writing this.
- EU’s Barroso told the European Parliament that better governance is the way to boost credibility
- There is more than one way to swing a cat; and at least two different approaches to fight a deficit; compare the modus of USA vs UK
- The French Trade Balance disappoints but can Sarkozy’s illegitimate coffers top it up ?!
- Euro Bank stress tests not troubling per De Jager, Dutch Fin Min
- Poor old BP - pity they couldn’t just have put their finger in it…now Uncle Sam is watching
- EuroZone Q1 GDP on expectation at +0.2
- German May Factory Orders -0.5, the first fall this years due to retracting ‘big orders’
- The biggest IPO in history is ready for the Greenshoe Shuffle at AgBank China
- Portugal’s T-Bill raising goes well. analysts happy
- Similarly the 10yr Bund auctions get good result
- The S&P futures trade soft down to 1019.80 from a session high 1029.90, currently firming up at 1026.50
- Gold off lows of 1085.15 at 1190
We have spent the best part of 6 hours with a move down following the S&P futures down and now back near earlier levels.
The key beneficiaries of the down move were USD, CHF and JPY.
When risk trades were sold led by AUD and AUD/JPY. USD/JPY held with the support at 87.00 was key to the reversal, now trading at 87.28
AUD/USD trades at 0.8497 after a test of the 0.8450 low; AUD/JPY touched 73.53 from an earlier high of 74.79, now at 74.10
EUR weakened against the USD to 1.2553, against the CHF to 1.3307 and the JPY to 109.30; currently 1.2590, 1.3319 and 109.86 respectively
Cable looked soft early on and looked to go lower to test key resistance at 1.5050 – ’twas not to be , a few minutes ago a short squeeze took it back to 1.5155, now back at 1.5127
The asian and european markets have shown that they lack real conviction – perhaps this is with us for a while longer…….