FXStreet (Barcelona) – Cristian Maggio, Head of Emerging Markets Strategy at TD Securities, summarizes the key developments and market performance during the European trading session.
Key Quotes
“The European trading session continues to revolve around German Chancellor Merkel’s comments about the EUR being too strong. EURUSD came off approximately 0.6% after the media echoed Merkel’s concerns.”
“Earlier today, speculation that the ‘German government prepares for a Greek default’ caused a smaller correction in the EUR of ca. 0.2%. The latter headline from Bloomberg echoed an article from German tabloid Bild sustaining that the government is preparing contingent plans in the eventuality of Grexit, but did not disclose the source.”
“While it does not surprise that the German government may be preparing contingency plans, it’s more surprising that EURUSD corrected as a consequence of this news. The pair is currently trading at around 1.1190, paring back some of today’s weakness after touching a low at 1.1151.”
“Equity markets seem to be looking for direction, following a mixed session in Asia. Government bond yields continue to exhibit an upside skew, especially in the 5y-10yr sector, with core European and peripheral markets up 3-4bp on the day, and Greece selling off more aggressively today.”
“Commodities are also bleeding, with most indices energy and metal giving back 0.4-1.0% on the day. At the time of writing, Brent and WTI are correcting 0.5% and 0.8% to around $64pb and $60pb, respectively, while gold is down smalls at $1180/Oz.”
(Market News Provided by FXstreet)