LONDON, June 10 (MNI) - Euro-dollar extended falls hit following the European Central Bank rate decision press conference, with reported stops below $1.4450 becoming an early downside target.
Rate traded to $1.4445 before recovering, but remained below $1.4500. Move lower, following Thursday's ECB 'signal' that rates likely to be hiked at the July meeting, seen as a 'buy the rumour, sell the fact' scenario as attention turns back toward eurozone peripheral concerns, especially Greece, with traders looking to adjust positions ahead of the weekend, many European centres closed Monday for Whitsun.
EURO SUMMARY: Opened in early Europe around $1.4487
of $1.44777, with recovery efforts capped at $1.4540 in this session. Rate initially eased to $1.4405 in early Asia before short covering, reported Asian sovereign buys and Gotobi demand at the Tokyo fix for euro-yen provided the upside drive to retest the NY recovery cap. Korea 25bps hike gave the added boost to take rate above before it topped out at $1.4552. Euro-yen was sold post fix and weighed back on euro-dollar, the rate easing below $1.4500 to $1.4484 ahead of the European open before recovering to hold close to $1.4500 into the European open. Stops sub $1.4470 were targeted and triggered to take rate to $1.4465, bouncing to $1.4495 before coming under heavier pressure as market targeted the larger stops sub $1.4450. Rate touched a low of $1.4445 before recovering, though move was held below $1.4500, before settling around $1.4480/85.
EUROZONE: Reported comment sfrom eurozone officials Friday, * GERMAN FINMIN: Sees first signs of economic recovery in Greece - Participation of private sector in additional Greek debt relief "unavoidable" - Bond swap that extends maturities by 7 years would give Greece time, fair solution - Germany has responsibility to lead in Europe * ECB TRICHET: The firm anchoring of inflation expectations all during the crisis has made the task of the European Central Bank much easier, ECB President Jean-Claude Trichet said Friday. Speaking at the ECB Watchers' Conference, Trichet -- according to a text of his remarks provided by the ECB -- avoided touching on monetary policy in favor of a comparison of economic heterogeneity in the euro area as compared to in the U.S. * ECB LIIKANEN: ECB should rethink collateral policy * ECB CONSTANCIO: Will do whatever needed to deliver price stab. - To continue using nonstandard measures for fin.stab - Exclusive inflation focus not enough - Must lean against the wind to avoid bubbles * GERMANY: Bundestag votes in favour of motion to approve new aid for Greece * EFSF REGLING: The strategy adopted to protect euro is working - Real eurozone economy is doing surprisingly well - Countries making adjustments but more needed - Europe fiscal exit strategy on track, unlike US, Japan
EUROZONE: Releases in the eurozone Friday, * BBK sees Germany's real GDP growth 3.1% in 2011, 1.8% in 2012 - Average CPI +2.5% in 2011, +1.8% in 2012 - Unemployment well below 3 mln in 2012; rate 6.5% - Outlook for long upswing to facilitate urgently needed deficit cuts
EUROZONE: Data released in the eurozone Friday, * GERMANY: May HICP unrevised -0.2% m/m, +2.4% y/y, April +2.7% - Germany May final HICP matches mni median fcast * GERMANY: May WPI unch m/m, +8.9% y/y; April +9.2% y/y * FRANCE: Industry output -0.3% m/m in Apr vs revised -1.1% in Mar - Manufacturing output in Apr +0.2% m/m vs Mar -1.1% * ITALY: 1Q final GDP rose 0.1% q/q and 1.0% y/y, after gaining 0.1%q/q in the 4Q 2010, as exports and domestic demand grew. The q/q data was confirmed from preliminary figures released on May 13.
EUROZONE: Press pick-ups concerning the eurozone Friday, * IMF: Christine Lagarde's appointment as IMF Managing Director is a "done deal", Grigori Marchenko, the IMF candidate backed by the former Soviet block, has said, as he prepares to back out of the race, the Telegraph says. * IRELAND: Anglo Irish Bank is close to putting its entire $10bn portfolio of US commercial real-estate loans up for sale as soon as this month, the WSJ reports. Anglo Irish is expected to sell assets at a discount to face value but the proceeds will likely be buoyed by the recovery in commercial-property values in major cities, the paper says. * EUROPE: A crack opened in Europe's credit markets last week that could portend deeper trouble for the region's banks and governments, the WSJ reports. Investors balked at buying a E1 billion ($1.46 billion) bond offering by Banco Santander SA that was backed by debt of Spanish local governments, the paper says. That left a group of big European banks that managed the deal holding roughly E500 million of the debt. The lack of demand, unforeseen by Santander or the managers, underscores the jittery nature of the region's credit markets, the WSJ adds. * IRELAND: The French government has opened the door to a compromise in the stand-off over Ireland's corporate tax rate, saying it will take into account Irelands singular situation in deciding its stance, the Irish Times says.
YEN SUMMARY: Opened in early Europe at Y80.12 and Y115.91. - Dollar-yen had a mixed session in Asia trading in a range of Y80.01-Y80.46. The rate staged a run-up on interest from Japanese Importers and Tokyo fixing-related demand, but reversed its course after failing to take out stops at Y80.50. On the downside, option-linked demand is again seen at around Y80.00. Euro-yen eased in Asia from NY session highs of Y116.80. The rate was sold off after the Tokyo fix an weighed back by a weaker euro-dollar to trade at a low of Y115.86. The European session saw dollar-yen once again lacking direction trading in a tight range of Y79.96-Y80.19. Good sized bids are in place at Y79.70/50, offers at Y80.30. Euro-yen tracked euro-dollar to trade at a European session low of Y115.52 before recovering to Y115.80. Demand clearly seen around the Y115.50 levels with traders buying on dips. Momentum still remains on the downside with traders taking a cautious approach. Small offers at Y116.40/45 with a break out to larger offers at Y116.85/90.
JAPAN: Data released in Japan Friday, * Tertiary index data from the Ministry of Economy, Trade and Industry: - Japan Apr Tertiary Index +2.6% M/M Vs Mar Rev Record -5.9% - MNI Survey Median Forecast For Apr Tertiary Index: +2.7% * Capital investment by small manufacturers is expected to fall 4.1% on year in fiscal 2011 following +21.2% in fiscal 2010, data released by the government's Japan Finance Corporation show. * Corporate Goods Prices Index data from the Bank of Japan: - Japan May Corp Goods Prices +2.2% Y/Y Vs Apr +2.5% - Japan May CGPI Posts 8th Straight Y/Y Rise - MNI Survey Median Forecast For May CGPI: +2.5% Y/Y - Japan May CGPI -0.1% M/M Vs Apr +0.9% - Japan May CGPI Posts 1st M/M Fall in 8 Mo
JAPAN: Press pick-ups in Japan Friday, * JAPAN PRESS: Most opposition Liberal Democratic Party lawmakers are leaning toward a conclusion that forming a coalition government with the ruling Democratic Party of Japan will not work and are looking instead at less binding types of cooperation, the Nikkei reports. LDP lawmakers now plans to cooperate with the DPJ, after it chooses a new leader, on a second supplementary budget and other policymaking for the post-disaster reconstruction, it says. Depending on who that new leader is, and whether the DPJ radically alters its policy platform, a grand coalition could re-emerge, the report says.
CHINA/KOREA NEWS: * KOREA: The recent strong upward trend in South Korean consumer prices is likely to continue, due mainly to strong domestic demand, the Bank of Korea said. The outlook for South Korean growth appears "solid," the BOK added. The statement comes after the BOK surprised markets earlier by raising its base rate 25 basis points to 3.25%. Most analysts had expected the BOK to remain on hold, given signs of a slowdown in global growth and South Korea's dependence on exports. * CHINA: China must stick to its tightening policy bias to tame inflation, Xia Bin, a central bank advisor said Friday, calling for government to raise interest rates further. * CHINA DATA: The Chinese trade surplus expanded further in May to $13.05 billion, up from $11.42 billion in April. This indicates a strong contribution to growth from net exports in Q2 and will dampen somewhat concerns about a slowdown in Chinese growth and overtightening of government policy to fight inflation.
Rates in London Trading TIME EURO-USD USD-YEN CABLE EURO-YEN EURO-STG 0500 GMT 1.4487 80.10 1.6310 116.04 0.8882 0600 GMT 1.4495 80.12 1.6320 116.13 0.8881 0700 GMT 1.4496 80.10 1.6307 116.11 0.8889 0800 GMT 1.4458 80.09 1.6280 115.79 0.8880 0900 GMT 1.4481 80.05 1.6278 115.92 0.8896 1000 GMT 1.4484 80.15 1.6296 116.08 0.8888
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