- Spanish bank bailout sees EUR/USD open above 1.2630, after closing on Friday near 1.2500
- Chinese trade data released on Sunday also helps risk sentiment
- Saturday’s Chinese data on industrial production was worse than early forecasts but not as bad as was feared after the China rate cut
- Japan big manufacturer sentiment seen improving
- France’s Hollande could win parliamentary majority
- ECB welcome Spanish banking aid
- Spanish bondholders may rank behind new bailout loans: Bloomberg
- US stock index futures open 1% higher. Nikkei +2%, Kospi +1.7%
- Copper gains 3%, Gold +0.8% and Oil +2.5%
The opening gap higher had been well flagged over the weekend and stops above 1.2625 were immediately triggered in early interbank trade, despite the market having closed in NY near 1.2500. The interbank market opened above 1.2630, traded immediately to 1.2670 and fell back to 1.2610 before steadying. There was a second attempt to threaten solid technical resistance near 1.2670 (38.2% and previous long-term trendline) but this also failed and the pair fell back to the stop-loss level at 1.2625 before steadying again. Ranges: 1.2610/71
AUD/USD followed the EUR lead but wasn’t overly impacted by the strong Chinese trade data, underperforming against the single currency. There were a few attempts to break above 1.0000 but all were repelled by some solid selling (although no mention of Sovereigns). Ranges: .9962/1.0005
USD/JPY traded up and down a 30 pip range on a number of occasions, driven by sentiment and flows in the JPY crosses. EUR/JPY aloso triggered some sizeable stops above 100.60 in early trade. Ranges: 79.36/66; EUR/JPY 100.29/88.
Cable 1.5505/57; EUR/GBP .8120/55; EUR/CHF 1.2005/17
