- German parliament meets at 07:00 GMT to debate on EFSF; vote expected within 3 hours of debate beginning
- Most German press reports say that EFSF funding bill will certainly pass
- Question remains whether bill passes with support of Merkel’s coalition partners or whether it relies on opposition support
- Japan’s retail sales fall by more than expected, -2.6% YoY
- UK pay deals steady
- South Korean trade surplus shows strong gains
- Bernanke: Unemployment is national crisis; will act if inflation gets too low
- RBNZ Bollard: NZD still overvalued at current levels
- Kospi bucks regional trend by gaining 1.5%; other regional bourses -1% on average; HK closed due to Typhoon
- Gold falls early below $1600 but rebounds quickly to end Asian session unchanged at $1610/oz
- Commodities like copper suffer large falls overnight, ease slightly during Asian trade
EUR/USD fell during the second half of the NY session from 1.3620 to 1.3520 and Asia has unwound most of that move. Falling commodity prices were the main driver in NY and although we’ve seen some slight falls in copper, Asia has mostly ignored that and concentrated on short-covering ahead of tonight’s Bundesbank vote. The session low at 1.3520 was seen in early trade and we’ve had a gradual move higher since. Reported sell orders at 1.3625 are capping for now. Ranges: 1.3520/1.3618
The AUD/USD has also been affected by the volatility in the commodity markets and started the session with a very soft tone. The comments from RBNZ chief Bollard sent the Kiwi lower and that also impacted on AUD/USD. Decent technical support at .9675 encouraged profit taking and the EUR/USD rally has now spread to the Aussie. Ranges: .9697/.9801
Cable 1.5541/1.5633, USD/JPY 76.38/60, USD/CHF .8950/.9021
