- Toyota exec: Current yen strength beyond limit of corporate effort. Wants Japan govt to do more to stem yen rise
- Italian Economy Ministry, Bank of Italy, market authorities meeting Tuesday to discuss market turbulance
- Italian 5 year credit default swaps rise 37 bps on the day to 368 bps
- OECD’s Gurria: Italy’s OK, has deficits and public finances under control, taking the right decisions
- Spain July jobless falls by 1.02% m/m, or 42,059 people to 4.08 mln
- Spanish 10 year govt bond yield 6.47%, highest since 1997
- Reports China buying Spanish bonds this morning
- Spain’s PM delays holiday plans to “monitor economic indicators” – PM office
- Swiss retail sales +7.4% y/y, compared to -4.1% in May
- Swiss purchasing managers index at 53.5 in July, stronger than median forecast of 52.0
- IMF estimates Australian dollar 10-15% over-valued
- Italy in eye of storm as cash runs out – AEP at The Telegraph
- OECD’s Gurria: US debt deal a relief but more negotiations, more spending cuts needed to resolve the issue
- UK construction PMI for July 53.5, marginally better than median forecast of 53.1
- Euro zone June PPI flat m/m, +5.9% y/y, pretty much in line with median forecasts +0.1%, +5.9% respectively
- EU summit deal will only slightly reduce Greek debt burden, provides govt with time to implement reforms – OECD report
Euro has lost ground this morning as periphery concerns return with a vengeance. EUR/USD down at 1.4190 from early 1.4255, EUR/JPY at 109.75 from early 110.40.
As periphery bond yields climbed higher so EUR/USD fell. Talk had decent buy orders lined up down at 1.4150/60 and so it worked out. We bottomed at 1.4158 and as reports circulated that China was in buying Spanish bonds so the single currency saw a decent recovery.
USD/JPY effectively unchanged at 77.40. Market wary of pushing the downside given recent reports Japanese authorities preparing intervention. Japanese automakers continue to pile the pressure on the authorities to address the burgeoning yen strength.
Cable down at 1.6275 from early 1.6320 against the general risk off backdrop. Asian sovereign buying has helped slow the decline.
AUD/USD down at 1.0865 from early 1.0930. IMF out stating aussie 10-15% overvalued. Stops have been duly tripped through 1.0880 and 10870 to session low 1.0855. More sell stops now seen through 1.0850.
