- IMF head to visit Spain on Friday for talks; Government insists is not bailout-related
- ECB announces Greek bonds to take 5% haircut after downgrade
- Empire State Manufacturing index 19.6 in June from 19.1 in May
- US attracts $83 bln in foreign capital inflows net of swaps in April
- Japan to upgrade economic assessment
- Eurogroup’s Juncker: Don’t equate Greece and Spain, fundamentals very different
- NAHB home builder sentiment index falls to 17 in June from 22 in May
- Moody’s downgrades nine Greek banks
- Rehn: Spain, Portugal, Ireland Italy need to outline budget measures for 2011
- S&P 500 breaks 200-day moving average, rises 2.35%
- US yields firm, 10 year note rise 0.05 to 3.31%
- Gold firms despite higher euro, ends at $1235; oil rises $2 to $77.05
EUR/USD overcame some lousy fundamental news today, especially the shockingly deep decline in ZEW. News that Spain is receiving a visit from the head of the IMF (said to be unrelated to any potential bailout needs. Uh-huh.Sure.) was downplayed as was news that Greek bonds would take a haircut at the ECB.
Protection of a 1.2300 barrier capped gains for a time but EUR/USD managed to rally as far as 1.2350 before falling into a narrow consolidation. Traders reported steady real money buying throughout the session again today while central banks and sovereign wealth funds were heavy buyers earlier in the day. 1.2355 technical resistance remains intact; stops are perched just above.
USD/JPY was an afterthought again today with flows dominated by modest flows into risk-on trades. EUR/JPY trades firm but below the well-established area of resistance between 114.00 and 114.50. We end at 112.75 from 113.05 intraday highs.
AUD/USD retested yesterday’s 0.8665 highs but was unable to build on receding risk aversion to break higher. 0.8574/0.8660 was the New York range. Likewise, CAD did not set a new high despite strong stocks and oil, treading 1.0242/1.0307.