EUR/USD at 1.2831-33, interest to sell EUR, EUR/JPY, EUR/Crosses on rallies, given concerns over Greece eurozone exit. Fears of Spanish banking crisis, as 10-year yields rose above key 6.00%, and Spanish CDS hit record highs. Yields for Spanish auction of EUR2.9bln in 12- and 18- month bills rose.. Spanish yields spreads over 10-year German bunds widened to new highs since introduction of Euro, to around 485bps. German bunds futures hit record high of 143.69, while cash yields hit new lows of 1.434% on flight to safety, from peripheral eurozone bonds.
Interest to sell EUR/USD on rallies - focus on whether big Asian accounts, China, sovereign, M.E. will stand aside from bidding EUR/USD given the downside risks. Focus on the 4-month lows of 1.2821 hit yest lowest level since January 18 1.2732. Speculation of huge option barriers at 1.2800. More stops below. EUR/JPY at 102.50-53, eye test of yest's 3-m, lows of 102.22, lowest sincde Feb 16 101.87. Japanese corporates, exporters, securities houses could sell on rallies, to hedge downside, given risks of break of 100.00 option barriers again to January 16 lows around 97.05 - lowest in 11-years since December 2000 levels of 96.14. WL
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