The Euro Swissy came to life today, gaining a full 11 pips in the aftermath of a good retail sales number. Swiss Retail Sales came out at 3.7% versus expected 2.8%. But important to note that the EUR/CHF did not move for around 11 minutes after the report, so the move up may be not related to the retail sales at all. There are speculations floating around that some Swiss names were buying the pair. The pair has retraced all of the gains post the news and is now trading at 1.2017.
Spain’s unemployment declined in July by 27,814, or 0.6% decline from the previous month. This is the 4th consecutive monthly decline in Spanish unemployment, but Spain still has the highest unemployment rate in the EU, it stood at 24.63% in the second quarter.
In other Spanish news, Spain raised 3.1 billion Euros in a debt auction but paid higher rates then at its previous auction a month ago. It paid an average yield of 6.647% for its 10 Year Bonds, this compares to a 6.43% at its previous auction on July 5. The bid to cover ratio stood at 2.4 versus the previous number of 3.2.
Spain also paid 4.774% for its 2 Year Bonds with bid to cover ratio of 3. Spain also paid higher rates for a bond maturing on October 31, 2016, it paid 5.971% compared to 5.536% previous. The bid to cover ratio was 2.7 compared to 2.6 previous.
Spain needs to raise another 37 billion euros this year and this auction is Spain’s last until September 6. Spain’s Treasury canceled an auction scheduled for the middle of August.
U.K. Construction PMI came in better then expected at 50.9, expectations were for 48.2. But the Pound still trails other risk assets today. It is only up 25 pips versus the dollar, compared to plus 54 pips for the Euro and 61 pips for the Aussie. It is down 7 pips versus the Japanese Yen while Eur/Jpy is up 22 pips. U.S. and Europe’s stock markets are also up, the Dow Jones is trading at 12,978 up 62 points on the day, it has fully recouped its losses from post the FOMC. Markets maybe lifted by expectations for the upcoming ECB decision in 2 hours from now. The ECB will deliver its interest rate decision at 7:45 AM NY Time, and will follow it up with a press conference at 8:30. Little before the ECB, at 7 AM the BOE will deliver its rate statement.