- Moody’s downgrades Portugal’s bond rating to Baa1 from A3. Still under negative review
- Chinese central bank raises lending and deposit rates by 25 bps
- Moody’s downgrades ratings on 7 Hungarian banks
- Euro zone March final services PMI 57.2, revised up from flash estimate of 56.9. Highest read since August 2007
- UK March services PMI 57.1, way stronger than median forecast of 52.5. Highest reading since February 2010
- Bank of Spain govenor: Central bank studying recapitalisation plans for 13 banks
Things picking up this morning, infact we’ve hummed along quite nicely. Sterling strength main feature.
Cable up at 1.6225 from early 1.6125, having been as high as 1.6249 (on EBS) EUR/GBP down at .8725 fom early .8805. Model funds were noticeable early buyers of sterling, amid rumour that UK services PMI (see above) was going to come in stronger than expected. The talk proved right on the money and then some, resulting in cable spiking higher post release.
Stops were tripped in the 1.6175/80 area on the way to session high 1.6249. An Asian sovereign was a noticeable seller around the highs. Their selling proved to be most opportune, as we then headed lower again as news came that China had raised rates.
Talk of barrier option interest now at 1.6250, 1.6280 and 1.6300.
EUR/USD down at 1.4165 from early 1.4205, having been as low as 1.4156. Pairing underminned initially by Moody’s Portugal downgrade and then by China rate hike. There have also been reports that two German Landesbanken “likely” to fail stress test, names mentioned Heleba and NordLB.
BIS was seen selling above 1.4190. Talk of trailing sell stops through 1.4150.
AUD/USD down at 1.0305 from early 1.0330. Pairing came under pressure in wake of China rate hike and got to 1.0285. Has recovered somewhat amid talk of China agent banks turning up on the bid at the lows. It’s a funny old World
USD/JPY sits at 84.35, unchanged on the day.
