Intraday Market Thoughts

Europe Changing Banking Rules

by Adam Button
Mar 27, 2013 0:07

More signs that European leaders plan to put bank deposits at risk emerged Tuesday. The Canadian dollar was the best performer while the yen lagged. The Asia-Pacific session lacks any meaningful economic data. 2 new Premium trades were added in EURUSD on Tuesday, while the 1 of the 2 GBPUSD shorts awaits hitting its final target at 1.5130. Ashraf will be in the Middle East until the rest of the week. Full details of the latest trades, including EURAUD, GBPUSD, EURGBP and gold are found in the latest Premium Insights.

Leaders in European parliament are working on new bank restructuring proposals that would include bail-ins for deposits worth more than 100K euros, according to a report from Reuters. The news confirms fears that the rules are changing.

The timing of the proposals is curious because it threatens to chase money out of the European banking system at a time when it's needed most. The euro slipped on the headlines but was buffered by strong buying interest at 1.2825.

Overall moves in the market were small and economic news countered the recent trend of US economic strength. Core durable goods orders fell 2.7% compared to a 1.1% decline expected; consumer confidence dropped to 59.7 compared to the 67.5 consensus forecast and the Richmond Fed was at +3 versus +6 expected.

The risk with US data over the next month is that later payouts for tax returns this year may be skewing consumer-driven data.

USD/JPY made modest gains on a report in Nikkei that the Bank of Japan will fold its liquidity and QE programs into one new, larger operation at next week's meeting. The danger in trading yen crosses this week is that Japanese year-end flows may lead to volatile moves.

Act Exp Prev GMT
Durable Goods Orders (FEB)
5.7% 3.8% -3.8% Mar 26 12:30
Durable Goods Orders ex Transportation (FEB)
-0.5% 0.5% 2.9% Mar 26 12:30
CB Consumer Confidence
59.7 68.0 68.0 Mar 26 14:00
CB Consumer Confidence (MAR)
59.7 68.0 68.0 Mar 26 14:00
Richmond Fed Manufacturing Index (MAR)
3 8 6 Mar 26 14:00
Consumer Confidence (MAR)
-23.5 -23.6 Mar 27 10:00

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