- Greece looking for a better deal in haircut negotiations
- RTRS source: Eurozone may ditch plans for private ESM involvement, Germany softening on eurobonds
- S&P downgrades Belgium to AA from AA+ on financial sector risks
- ECB’s Mersch says 1yr refinancing a problem at European banks; ECB could take action but not yet
- RTRS: Eurozone official says ECB won’t be an option unless EFSF leverage fails, yields continue rising
- Finland continues to rule out Eurobonds
- Dow Jones: plans to lever EFSF by more than 2x are dead
- BOE’s Weale says growth flat UK recession risk “quite appreciable”
- ECB’s Gonzalez-Paramo says policymakers need to understand urgency of the situation
- German, Finnish and Dutch fin mins say agreement about small euro treaty changes
- Italian 10-year yields end at 7.33%, up 20 bps.
- S&P 500 down for seventh day, losing 0.2% to 1159; on the week down 4.7%
- European stocks avoid 10-day losing streak with small gains
- Oil up slightly, gold down $10 to $1688
Markets entered US trading on a weak footing after a terrible Italian bill sale. After spiking to a seven-week low of 1.3212 as US traders got to their desks, EUR/USD rebounded on the ESM report but barriers at 1.33 held off the rally until the wave of bad news from 1) Belgium 2) Finland and 3) Greece drilled the pair back down to 1.3230.
The pattern in EUR/USD was ubiquitous throughout markets except for USD/JPY which crept higher throughout the session on intervention fears but also partly on new worries about Japan’s debt load.
EUR/CHF shot 130 pips higher on rumors of an SNB statement/press conference and then gave half the gains when the rumor proved bunk, closing the week at 1.2317. USD/CHF touched an 8 month high.