Je voudrais a higher credit rating, s’il vous plait…
So the French have been downgraded and the front cover of the Economist wasn’t that far wrong after all… was it now…
Market reaction was for the most part muted, despite the obvious knee jerk reaction to sell EURUSD on the announcement. In that thin rarefied air between the US close and Asia open, the single currency moved from around the 1.2812/15 area through latent and resting stops and traded down to an overnight low of 1.2765/7, where it was fairly quickly bought once again.
The ensuing price action since then paints a whole heartedly different story where neither the bulls nor the bears are in any real control and the whipsaw around 1.2800 is enough to give you sore eyes and/or whiplash if you’re trying to follow it. Everyone is now fully aware of stops reported above the 1.2825/30 area, with offers and further stops laced into the road higher to 1.2880.
BOJ and RBA
Elsewhere the BoJ met this morning/overnight and no change was the case. I suppose they’ll just spend the next few weeks talking about a weaker Yen and hoping for the best. The timeline now is for the election on December 16th and the next central bank meeting four days later.
RBA policy minutes were out overnight and simply confirmed that the RBA has room to move, can and will if pushed hard enough, but for now, sits as it sits…
The SPX managed to claw back the recent weakness from last week, and as mentioned yesterday, the important daily close above the 1380 level was manifested overnight. For now, this signals further consolidation with an upside bias as the Americans start defrosting turkeys for Thursday.
As we have now all been repeatedly painfully made aware, today sees another flaccid vote on Greece and whether they get more cash. Who cares, I mean really, who really cares anymore. They’ll get their cash and if it’s not today it will be at yet another conference call/vote/finmin meeting etc.
With regard levels on the day, given that nothing of any real note has happened since yesterday as far as decent moves are concerned, then simply put the same levels mentioned yesterday hold water today.
Helmets on and good luck out there.