Spanish voting revives the euro again
What happened overnight
– Spanish PM Rajoy’s party performs well in regional elections
– Japan’s trade data show further deterioration
– Canada’s government rejects Malaysian bid for energy assets
The EUR is broadly firmer, with EURUSD reversing Friday’s drop and regaining 1.3070. The ZAR and INR are also having strong days so far, while the JPY has underperformed, with USDJPY reaching 79.87 highs. In contrast, AUDUSD has lagged the move following a statement from Australia’s Treasurer that he would have to trim the budget further in response to lower than expected receipts from commodities. Similarly, the CAD has not regained last week’s lost ground after weekend news that the Canadian government has rejected a Malaysian company’s bid to buy Canadian energy assets. Equity markets held up well in Asia despite the 1.7% sell-off on Wall Street Friday and are posting modest gains in Europe, with the S&P future up 0.4%. Spanish 10-year yields are up a few basis points, but still 40bp below levels at the beginning of last week.
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Credit Suisse