IMF says Euro-zone banks need a recovery plan A very quiet morning has turned into a big down-day for the JPY crosses Initial gains on regional bourses turn into losses Some US Banks allowed to repay TARP China to ease rules on investment overseas by its citizens/corporations Australian job ads fall for 13th successive month, this time by 0.2% and PM Rudd says expects unemployment to rise NAB survey of Australian business conditions falls 4 points UK retail sales fell 0.8% in May, YoY Fall in UK house prices is slowing down Rise in Treasury yields is vote of confidence in the economy- Fed China denies reports of iron ore price agreement
It has been a trading day with two very distinct halves. The first half saw almost no movement whatsoever but when some regional bourses gave up almost 1% gains and fell into the red and this was then followed by some heavy EUR/JPY selling out of Tokyo, we saw a different second half with one-way traffic in the JPY crosses. Many are attributing the selling to the IMF statement on Euro-zone banks. EUR/USD opened at 1.3890, rose early to 1.3930 but has since drifted lower on the cross selling. AUD/USD led the way up in early trade as buyers appeared keen but some insipid data and remarks from PM Rudd have undermined the AUD both against the USD and the JPY. Sterling has taken a back seat as usual during Asia but early European trade may look favourable on the latest RICS housing data. Dealers report heavy stops in EUR/GBP below .8560. Markets: Hang Seng -1.5%, Nikkei, Shanghai and Kospi -1%, Sydney -0.4%. Gold -$3 at $949/oz. Oil flat $68/bbl. Ranges:EUR/USD 1.3854/1.3936, USD/JPY 97.88/98.56, EUR/JPY 135.65/137.30, AUD/USD .7855/.7933, cable 1.5985/1.6104.