FX Market Opens, EUR Hammered, CHF Bid; S&P To Open -30pts

Tyler Durden's picture

As Citi's Steven Englander suggested earlier, the developments in Cyprus will lead to EUR selling and USD, CHF, GBP, NOK and SEK  buying (in that order). He adds, the issue is whether to believe that the Cyprus levy on depositors is one-off, but depositors and investors elsewhere could easily see this as another in a string of ‘one-offs’ and react badly. The risk-return to depositors in countries with weak banking systems may not favor taking the risk that Cypriot banking system was so unique that such a levy would never be considered elsewhere. The levy on deposits ostensibly covered by deposit insurance may also undermine confidence in weak banks. The question is whether this becomes a full-blown crisis or a mini-crisis. For now, as FX markets open, it appears EURJPY is getting hammered (from 124.47 close to 121.6) implying S&P futures will open down around 30 points. We are sure Abe is watching closely...

 

 

Given the element of surprise, it is probably the case that euro zone policymakers will not have concrete measures prepared to convince depositors elsewhere that this will never happen again. So it seems likely in the first instance some resurgence of tail risk will re-appear and that there is a risk that we could see a downward spike in the euro and significant backing up of spreads.

 

EURUSD has opened and is -140 pips for now...

 

and CHF is bid...

 

and all that good jawboning by Carney gone dow the drain... as GBP bid too...

 

the question is will the Swissie bid on Europe's risk flare recouple the S&P 500 with reality once again... as it did after theItalian election...

 

and of course everyone's favorite USDJPY...

 

Leaving us asking 'Is This It?' as a terrible case of deja vu comes over the market once again...

 

or this?

 

or perhaps more appropriately this?

 

Charts: Bloomberg

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machineh's picture

If Cypriots spoke Spanish, they could call their deposit freeze a 'corralito.'

The EU has gone Argentine on us. Just like the Vatican.

Chew on that, bItCHeZ.

kaiserhoff's picture

Quick, someone dress up Dick Bove's cadaver, so he can tell us it's all peachy, swell, keen.

kaiserhoff's picture

Sh.  Don't tell him.

Every little ting, gonna be all right.

https://www.youtube.com/watch?v=FJd21z7T99g

 

 

flacon's picture

I am very curious how gold will react. It's either going to get hammered down to $1,560 again or it's going to $1,619. .... I am just afraid of an excuse to hit it down big time. 

fonzannoon's picture

gold will be up tomorrow. I don't care if the dollar skyrockets. they will both be up. GLD may have to issue more shares to keep up with the demand for pieces of paper...

bonderøven-farm ass's picture

I plan on donating 100 oz. of silver Wood Bisons to my farm's lake bottom upon delivery.

BaBaBouy's picture

Ya Gatta Love These Fecking BankSters ...

They Have All Our Paper Fiats On Their HARD-DRIVES, And Can Do Whatever The Fuck They Want With It ...

And The FEDi Has Most Of The Worlds CB's GOLD Burried Under an NYC Street (Just TRY And Get It Back...) ...

All Will Soon Learn That GOLD $50K Is Not That Far Off ...

cocoablini's picture

Expect negative interest rates...like take 10% of your deposits. Everyone expecting bond rates to skyrocket can forget it. Getting zero% is a great return in a deflation...

Comay Mierda's picture

didn't Goldman recommend buying EURGBP a few days ago?

muppet slaughter continues

Manthong's picture

After Kevin sobers up from the St. Paddy’s all-nighter, he’ll be buying EUR to bring it back up.

Divided States of America's picture

S&P down 30??? I think you mean Dow down 30...PPT now working over the weekends too. This market doesnt look like it wants to fall over anything.

francis_sawyer's picture

TRIPLE LINDY HEADFAKE...

~~~

Those fucking jews prolly engineered this whole shebang...

1. ISSUE 'GO LONG' reco [to muppets]

2. Haircut Cyprus 'savers'

3. All Hilarity ensues

4. Cover PUTS & go long Euro during panic

5. Hire the PRICEY clown act for Solomon's bar mitzvah [& lavish LasVegasDave a BONUS for cleaning the pool]...

Ignatius's picture

Gold popped at the opening -- $1600+

otto skorzeny's picture

it will do the opposite of what you expect

Hulk's picture

So expect the opposite, Bitchez !!!

maxmad's picture

Limit down!!!  Followed by bank runs!!  Well played EU!!  Well Played!!

a growing concern's picture

We demand the deer in headlights!!!

Al Huxley's picture

I can't think of a clearer confirmation that this is the time to convert any cash you might have in ANY bank and convert it into metals.  So given that, if the best form of insurance against the oligarchical thievery that just occurred in Cyprus goes DOWN in price, I'll take that as a gigantic gift.

IMA5U's picture

Only if it is HEAVY METAL

GOSPLAN HERO's picture

National Socialist Black Metal?

IMA5U's picture

Only if it is HEAVY METAL

RockyRacoon's picture

What happens to the "cash" I have stashed in a Paypal account?  It normally goes to pick up a few PM trinkets now and then.  Their lack of a bank charter could come in handy?  ...or not?

Jugdish's picture

I wanna rape your gold after this all collapses.

Non Passaran's picture

It doesn't matter what gold does.  

There is no doubt in my mind that I should keep buying.

If it drops, I'll buy more. I bought recently at about the current price so for now I'm done with shopping unless the price becomes significantly cheaper - then I'd go out of my way to buy more.

Today I expect it to jump to at least $1,610.

Stoploss's picture

http://blogs.telegraph.co.uk/finance/matspersson/100023412/tomorrow-cypr...

 

Heh..

 

Right this very second would be a good time to put your hands on your current fiat currency, as it's physical value is about to quadruple.

This is the ONLY time fiat currency has any fungible value, and it DOES NOT last very long.

US will feel this big time.

Lotso fiat gonna move in a fuckin hurry..

scatterbrains's picture

thing of it iz  yah niggers gonna pay us bankstas come hell or high water.. don't git it fucked up

francis_sawyer's picture

Every little ting, gonna be all right.

~~~

Turn dat frown upside down, Mon...

Stoploss's picture

Will this be seen as gold positive???

max2205's picture

He who sells first....

Ben will protect us...sure

When you get zero interest, why leave it in the bank when this could happen. Deposit Insur or not.

ar01's picture

From a game theory perspective, don't the banks hold the upper hand to the ECB? The ECB is threatening to cut liquidity lines to Cypriot banks. Personally, I'd call the ECB out on their bluff -- no way they'd allow the contagion that would come from that. 

Silver Garbage Man's picture

I agree, but you know behind the curtain someone has a gun to their head.

Howdan's picture

I wouldn't be surprised if the "politicians" come out randomly with "positive spin" headlines to cause spikes in these markets to burn any shorts. That's what usually happens.

Cue Europe-wide "Short selling bans" tomorrow.......

EscapeKey's picture

Never short positive rhetoric.

resurger's picture

that's what they usually do

+1

grid-b-gone's picture

It's pretty hard to spin "We chose to screw depositors rather than the politically connected debt risktakers."

The level of understanding will permeate the next stubborn layer, even if decision makers pull back from the plan by Wednesday. They've revealed the next in line to lose after all state-owned collateral has been pledged.

It is also revealing that this drastic action came before meaningful budget and public spending cuts.     

kaiserhoff's picture

Air pocket, Bitches.

gimli's picture

Don't worry Kevin Bacon is on crowd control:

http://www.youtube.com/watch?v=zDAmPIq29ro

TeamDepends's picture

Thank you sir, may I have another?

TeamDepends's picture

"Assume the position"

youtube.com/watch?v=qdFLPn30dvQ

Assume the postion folks, it's coming.