Intraday Market Thoughts

From US Debt Ceiling to Europe's Bond Spread Ceilings

by Ashraf Laidi
Aug 2, 2011 14:43

The Fed's favourite inflation gauge came in at 1.3% y/y, while UK PMI remaiend well above 50. But dovish comments from BoE's Charles Goodheart suggesting the MPC to have discussion on whether more QE is needed is helping to weigh on sterling. Intensifying deterioratiion in Spanish sovereign debt has pushed PM Zapatero to cut short his summer vacation as markets bet that Spain will be next inline for a bailout. Spain's 10-year yields hit 6.45%, nearing the key 7% level, which triggered Greece's bailout. The tensions are compounded by political uncertainty as Zapatero calls for early election in Nov 20. EURUSD finds support at . . .

EURUSD finds support at 1.4150s, while S&P500 is expected to stabilize near the 200-dma around the 1270s. Gold & silver may display slower action than last week but the lack of considerable selling remains a notable sign of resilience. Despite our continued bearishness in USDJPY, we issued tactical longs in the pair in last night's Premium Trades. The laetst edition of Today's PREMIUM TRADES is titled:"Explaining Dual Trades, USDJPY Temporary Shift" seen here:

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