Hopes of Greek Government Spur Short Covering Rally in Euro

GFT Forex

Top Stories

  • Chinese data misses
  • UK PPI mixed
  • Nikkei off -0.63% Europe -0.18%
  • Oil at $96.28/bbl
  • Gold at $1578/oz.

Overnight Eco

  • EUR German Consumer Price Index (MoM) 0.2% vs. 0.1%
  • GBP Producer Price Index Input n.s.a. (MoM) -1.5% vs. -0.9%
  • GBP Producer Price Index Output Core n.s.a. (MoM) 0.7% vs. 0.4%

Event Risk on Tap

  • USD Producer Price Index (MoM) expected at 0.0%
  • USD Producer Price Index Ex Food & Energy (MoM) expected at 0.2%
  • USD U. of Michigan Confidence expected at 76.4
  • CAD Unemployment Rate expected at 7.3%
  • CAD Net Change in Employment expected at 10.0K

Price Action

  • USD/JPY rises 79.0
  • AUD/USD bounces after testing lows at 1.0020
  • GBP/USD quiet as data has little impact 1.6120
  • EUR/USD bounces as 1.2900 holds for now

After plumbing fresh lows in Asian session trade risk FX bounced in midmorning European dealing on speculation that Greece may cobble together a working coalition government without resorting to another Parliamentary election. Earlier in the session weak Chinese economic data and a massive unexpected loss from JP Morgan kept risk FX under pressure with EUR/USD coming within a few points of the 1.2900 barrier while Aussie drifted lower towards parity. JP Morgan reported a trading loss of more than -2 Billion dollars in credit derivatives as a result of hedge gone wrong by its CIO office in London.

Meanwhile in China industrial production weakened to it lowest level in nearly a decade printing at 9.3% versus 14.1% eyed. Retails Sales were also softened to 14.2% versus 15.1% forecast while fixed investment slipped to 20.2% versus 20.5% and CPI came in line at 3.4%. The data showed that Chinese growth is clearly slowing and may weaken further if the situation in Europe deteriorates further dampening demand from China’s largest export market.  

However risk FX reversed its losses after Greek officials reported that chances of a coalition government that would encompass conservatives, moderates and socialists and would have a two year mandate were increasing. Although the prospect of some political stability in Greece eased investor concerns, it still remains to be seen if any future Greek government  will abide by the bailout terms set by the Troika. Nevertheless, the  news helped to calm the credit markets and the well subscribed Italian bond auction which placed 10 Billion euros at bid to cover ratios of 2.49 from 1.81 the period prior and yields of 0.865% vs. 1.249% all helped to firm up risk assets as the night progressed.

In UK the PPI data printed mixed with input declining by -1.5% vs. -0.9% eyed while output rose to 0.7% from 0.4% forecast. The drop was largely due to sharp decline in oil prices. Output prices remained elevated at 3.3% on annual level, but were still at their lowest pace of growth since 2009.  The news was relatively neutral to any future BOE monetary policy considerations and had little impact on pound trade as the pair remained near its session lows at 1.6120.

In North America today the markets will get a glimpse of the US PPI data, U of M survey and Canadian jobs report. However, the focus will likely remain in JP Morgan as traders try to assess the long term impact of the large trading loss the bank has suffered. For now the reaction has been relatively contained, but if US investor begin to sell off the financials as the day proceeds risk FX will likely return to session lows with EURUSD testing the 1.2900 barrier while Aussie probes parity.    

FX Upcoming

CurrencyGMTESTReleaseExpectedPrior
USD 12:308:30Producer Price Index (MoM)0.0%0.0%
USD 12:308:30Producer Price Index Ex Food & Energy (MoM)0.2%0.3%
USD 13:559:55U. of Michigan Confidence76.476.4
CAD12:308:30Unemployment Rate7.3%7.2%
CAD12:308:30Net Change in Employment10.0K82.3K

Rates

View Comments (0)

Recommended for You

  • Tycoon buys 30 Rolls-Royces for Macau hotel

    A Hong Kong tycoon has placed the biggest ever order for Rolls-Royce cars, agreeing to buy 30 Phantoms to chauffeur guests at a luxury resort he's building in the global gambling capital of Macau. Stephen Hung's $20 million purchase surpasses the 14 Phantoms bought by Hong Kong's Peninsula Hotel in…

    Associated Press
  • Enjoy this refreshing Triple Play offer!

    Get FIOS TV Mundo starting at $79.99/mo. w/ no annual contract + 2-yr. price guarantee. Or sign for 2 yrs. & get a $300 prepaid Visa. Click here.

    AdChoicesVerizon FiOS ®Sponsored
  • Tycoon's arrest sends shock wave through Russia

    Tycoon's arrest sends shock wave through Russia MOSCOW (AP) — The arrest of a Russian telecoms and oil tycoon has sent shock waves through the country's business community, with some fearing a return to the dark days of a decade ago, when the Kremlin asserted its power by imprisoning the country's…

    Associated Press
  • Before You Buy Alibaba, Check Out 4 Top China Stocks

    Before You Buy Alibaba, Check Out 4 Top China Stocks While investors gear up for Alibaba Group 's (BABA) hotly anticipated initial public offering, don't forget about other Chinese stocks that are worth keeping an eye on. Today's Young Guns Screen of

    Investor's Business Daily
  • As Fed takes baby steps, Cramer's trick for profit

    In turn, Cramer says making money in the market, involves looking at the environment through the lens of the Fed. "The trick is to remember that they speak for the common person," Cramer said. "The Fed wants the common person to make money." With that backdrop always in mind, Cramer says it becomes…

    CNBC
  • Costco Stores in Canada to Stop Taking American Express

    “The credit card relationship between American Express and Costco Wholesale Canada will not be renewed when it expires” on Dec. 31, the company said today in an e-mail to Canadian customers. The message was attributed to Lorelle Gilpin, vice president of marketing and membership for Costco…

    Bloomberg
  • "The Retiree Next Door": How successful retirees stretch their savings

    "The Retiree Next Door": How successful retirees stretch their savingsBy the time she hit her late 40s, Toni Eugenia wasn’t sure she would ever be able to retire. Eugenia, 56, a pharmacy technician who lived in Houston, was nearly $200,000 in debt and

    Yahoo Finance
  • CNBC Anchor Calls Out Fed-Hater Bill Fleckenstein In Startling Shouting Match

    CNBC Bill Fleckenstein of Fleckenstein Capital appeared on CNBC's Futures Now program on Tuesday. Futures Now host Jackie DeAngelis came out swinging, asking Fleckenstein right at the top if he was willing to admit that he had misunderstood monetary policy. Sounding taken aback, Fleckenstein…

    Business Insider
  • SpotMe: The App That Talks Event

    SpotMe Mobile App Consultants Help You Realize Your Ideal Event. Backed By 14 Years of Event Production Experience.

    AdChoicesSpotMeSponsored
  • Beanie Babies creator's sentence debated in court

    Beanie Babies creator's sentence debated in court CHICAGO (AP) — Federal prosecutors seeking to put the billionaire creator of Beanie Babies in prison for hiding millions in Swiss bank accounts told appellate court judges Wednesday that the toymaker's sentence of probation threatens to erode the…

    Associated Press
  • Apple to unveil new iPads, operating system on Oct. 21 : report

    The company plans to unveil the sixth generation of its iPad and the third edition of the iPad mini, as well as its operating system OS X Yosemite, which has undergone a complete visual overhaul, the Internet news website said. Trudy Muller, a spokeswoman for Apple, declined to comment. The iPad is…

    Reuters
  • Play

    Citi, Bank of America Offer Discounted Mortgages

    Citigroup and Bank of America will offer mortgages at discounted interest rates to help borrowers with low incomes or subprime credit. AnnaMaria Andriotis joins MoneyBeat. Photo: Getty.

    WSJ Live
  • Margaritaville casino owners seek bankruptcy

    The owner of Biloxi's Margaritaville casino has filed for Chapter 11 bankruptcy protection Tuesday, only hours before a hearing where the landlord aimed to seize the property. The filing by MVB Holding LLC in U.S. Don Dornan, a lawyer for landlord Clay Point LLC, said the company had planned to ask…

    Associated Press
  • Play

    What the Fed Meeting Means for Bonds

    Janet Yellen & Co. are expected to hint at their timetable for raising interest rates. Here's how investors should prepare ahead of the meeting.

    WSJ Live
  • Embraer to sell 50 E-175 jets to Republic in $2.1 billion deal

    Brazil's Embraer SA, the world's third largest commercial planemaker, said on Wednesday it booked a firm order from U.S. The deal, which will be included in Embraer's order book for the third quarter, is valued at $2.1 billion, the planemaker said in a securities filing. The planes will be operated…

    Reuters
  • 1 Tip To Lose Belly Fat

    It's Hollywood's Hottest Diet And Gets Rid Of Stubborn Fat Areas Like Nothing Else.

    AdChoicesagoodcooksSponsored
  • Gilead Stock Is Falling On These Drug Setbacks

    Gilead Stock Is Falling On These Drug Setbacks Gilead Sciences (GILD) shares are backsliding Wednesday on news that the patient drop-out rate for hepatitis C drug Sovaldi is quadruple that of clinical trials. In addition, the biotech's Phase 2 study results

    Investor's Business Daily
  • Here's What Mark Cuban Wishes He Knew About Money In His 20s

    Cuban is the owner of the Dallas Mavericks basketball team. Billionaire investor and entrepreneur Mark Cuban is generous with his advice. When we asked him what he wishes he'd known about money in his 20s, he said:

    Business Insider
  • SHOE COMPANY: Our CEO Just Disappeared And Most Of The Money Is Gone

    "and like that: he's gone." This is an actual headline from a company press release: "CEO and COO disappeared, most of the company's cash missing." (Via FastFT) In a statement, German-based shoe company Ultrasonic said its CFO,  Chi Kwong Clifford Chan, has been unable to reach the company's CEO,…

    Business Insider
  • 10 rock-solid stocks for conservative investors

    10 rock-solid stocks for conservative investors Shares with low volatility can beat their indexes with less risk Bloomberg News/Landov U.S. Bancorp is the cheapest S&P 500 stock

    MarketWatch
  • Billionaire Investor Says Chinese People Work Harder And Western Companies Could Face Deep Trouble After Alibaba IPO

    Michael Moritz, the chairman of VC firm Sequoia Capital, is a huge fan of Chinese internet companies and reiterated his enthusiasm for the Chinese market in an interview with The Wall Street Journal Wednesday. The billionaire investor described the Alibaba IPO as a “major landmark event” that is as…

    Business Insider
  • Top Analyst Upgrades and Downgrades: AEP, BHP, GE, Incyte, 3M, Tyco, Under Armour and More

    Top Analyst Upgrades and Downgrades: AEP, BHP, GE, Incyte, 3M, Tyco, Under Armour and More Stocks were firm on Wednesday morning ahead of the FOMC meeting outcome. Tuesday’s rally may have sparked higher interest again, and investors are looking for bargains

    24/7 Wall St.
  • Norwich Information Security MS

    Online, accredited, top ranked. NSA Center of Academic Excellence. Recognized by the Department of Homeland Security. Download your free brochure!

    AdChoicesNorwich UniversitySponsored
  • 6 Things Debt Collectors Wish You Knew

    The work debt collectors do is not popular, and has become increasingly derided by those who don’t like what we do or simply don’t know the facts about debt collection. Too often, debt collection is painted with a broad brush to create a portrait that isn’t accurate, and doesn’t properly educate…

    Credit.com