Traders talking about reports of key EUR430mln Greek bond payment on international law bond that matures today, May 15 - for those owners who opted out of the Greek-PSI plan. Some talks that a Scandinavian SWF is one of the owners of the bond and a non payment to the non-PSI bond holders could trigger default fears, despite the small amount. Though more likely than not - it could likely be paid. But in event of non-payment - could trigger more fears of default.
On FX, EUR/USD at 1.2833-35, focus on the rising Spanish and Italian yields, and widening of spreads between Spanish/ Italian yields vs German bunds on risk aversion, fears of eurozone contagion. German bunds hit record lows around 1.451%. EUR/USD bids at 1.2800-10, stoploss, options there and more below at 1.2775/1.2750. Real money and good offers at 1.2870-75/ 90-00, with hedge funds and CTAs good sellers. EUR/SGD at 10-year lows around 1.6125-35. Eye break of 1.6100 and then the psychological 1.6000 level. USD/SGD hit 1-month highs of 1.2585, high since April 11 1.2633, on good buying by Germans, Europeans on broad based USD demand, but UK clearers and funds, local banks sellers on rallies. Interest still for lower Cross/SGD - EUR/SGD, AUD/SGD, NZD/SGD - except for GBP/SGD - which is firm due to EUR/GBP sales to 3-half year lows on safe haven flows into UK Gilts. WL
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