- Stocks continue to be led higher by utilities and basic materials. However, the SMI remains in the red, largely due to less than impressive earnings from Richemont (-6.10%).
- Euribor curve is flatter this morning, as markets re-price impact that potential LTRO redemptions will have on money market rates. As a result, Euribor/OIS spread is little changed, with the 3-month Euro-dollar cross-currency basis swap rate c.17bps below Euribor.
- Peripheral bond yield spreads are marginally tighter, with PO/GE 10s tighter by 5bps and IT/GE 10s tighter by 3bps. Of note, Diário Económico reported citing sources that the Portuguese government expects to receive a signal of flexibility for the financing conditions of its bailout.
- USD/JPY continues to trade heavy, with options implieds also underpressure as profit taking, as well IR related selling by a major US name weighed on prices. Talk of bids at 89.25/00 and 89.25/50/75 mark option expiry levels. Similar price action is also being observed in EUR/CHF, where the spot rate is down around 20pips following an impressive rally last week.
Print 10:20, 21 Jan 2013 - Market Analysis - Source: RANsquawk
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