Intraday Market Thoughts

Spanish Worries Continue to Mount, Aussie Jobs Next

by Adam Button
May 10, 2012 2:01

Spain nationalized Bankia and plans further measures to restore credit on Friday but Spanish CDS hit a record on Wednesday. The yen was the top performer while the Australian dollar lagged in a volatile day of trading. Australian employment is the highlight of the Asia-Pacific session. The latest on Tuesdays Premium Intermarket Trades is seen below.

Spain took a 45% share of Bankia ahead of a package of bank reforms to be announced Friday that officials hope will end the credit crunch. Adding to the worries was a report from the European Commission that said Spain will have a 6% deficit compared to the 5.3% deficit-to-GDP expected.

Spains main stock index closed below the US crisis levels for the first time since 2003.

On the other side of Europe, Greeces Syriza party announce that it is unable to form a government, leaving little doubt that a second election will take place in June. The first post-election poll show Syriza and leader Tsipras surging to the lead with 25% of voters. A win by the anti-austerity party would significantly increase the chances of Greece leaving the Eurozone.

The euro fell to 1.2910 in early European trading but later bounced back to 1.2950. Overall, however, the news is grim for the region and that will continue to weigh on the euro.

The US stock market fell hard in early trading but once again trimmed losses to a minimum, closing down 0.7%. Fed members Kocherlakota and Pianalto did not signal any changes in policy and Bernanke is unlikely to roil markets Thursday when he speaks via satellite to an audience in Chicago.

The main event of the upcoming session is April Australian employment at 0130 GMT. The economy is expected to shed 5K jobs and the unemployment rate expected to tick up to 5.3% from 5.2%. The Aussie fell as low as 1.0021 on Wednesday and it would likely take a miss of more than 5K jobs to send it below parity.

The latest on Tuesdays Premium Intermarket Trades is seen below. All targets hit in EURUSD, gold and AUDUSD shorts, while stopped out in USDCAD shorts. For the rest on gold and AUDCAD, get direct access to those trades here:



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