Wednesday update…Forex market wimps out as equities tread water …commodities gain

US closing

Well sorry folks we didn’t get any sort of volatility in markets yesterday which probably goes to prove that events panned out exactly as expected.I get the feeling that had equities made a move then forex markets would have followed. 13,000 on the Dow Jones remains a hurdle but fighting stock market strength has not been a success this year for sure so we may well make it.Commodities were a different story ,Oil on a 9 month high and gold powering ahead. Someone’s wrong.
In forex markets there was something for Euro bulls and bears to cling to. We didn’t end up anywhere really in EUR/USD failing upside and down.Just to repeat I do think that if we get decent move in stock markets it will be followed by the Euro and in reverse the US Dollar and Yen.
While the consensus on Greece seems to agree we are for sure not out of the woods and may indeed just have bought a bit of time there was no real attempt to knock the Euro down .There is already talk of the month end LTRO (Long term refinancing operation) by the ECB which was such a surprise last time. Talk of a trillion Euro drawdown this time as banks at least can get very cheap liquidity. As we know its the ECBs form of QE but just hasn’t really set any forex cages rattling yet.. What it will continue to do is keep domestic banks buying their own government bonds so helping EZ bonds. I mention this because it is going to get a lot of air space for a week, so get used to it.

Headlines

• Greece…..Apparently delighted with their dosh…but wait, what are these stories of breaking the 2012 budget deficit targets already
• Greece.. Introduces bond legislation to lock in all bond holders…that was quick for once
• IMF… Lagarde expected to be Mrs 10% with a € 13 billion contribution to the aid package
• EZ AAAs No comments from the AAA countries but 14 hours of talks and Troika inspectors in Greece permanently tell you this is the last through of the dice for Greece.