EURUSD Soars On No News: ECB Now Intervening In FX?

Tyler Durden's picture

Out of nowhere, and based on no news whatsoever, the EURUSD just jumped by 40+ pips in what appears to have been one trade. There is no news to justify this move, as the only possibly related headline to come out was that the Greek finance minister sees parliament vote on the new EUR 130bln aid deal in January. This is neither news, nor is it bullish. In addition, we have information now that Intesa has now been halted on the Italian market due to excessive (downward naturally) volatility. Which begs the question: has the ECB decided it has had enough of bond monetizations and is now actively engaged in FX warfare against the Fed, or are French banks now massively dumping USD assets and buying EUR with the proceeds with indescriminate abandon, as was reported first previously here.

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BaBaBouy's picture

Europes' gonna make Cairo look like a Sunday Stroll in the Park...

ratso's picture

Tyler has previously posted a long article on how euro repatriation is affecting the euorusd cross.

Maybe this is just more repatriation.

firstdivision's picture

This is where I'm at a bit of a loss.  If the Euro is looking to be on its last leg, why repatriate to Euros?  Wouldn't you want more USD to convert to Deutche Mark, Franc, Peso, etc.? 

swissaustrian's picture

The real question is: Why does everybody think that French banks have the majority of their liabilities denominated in EUR? It´s more likely that they´re looking for USDs.

ratso's picture

Dollar assets like USD stocks and bonds are being sold to try and prevent liquidity in the banking and finance sector from seizing up like a seized engine.

sqz's picture


French banks like other European banks are having to meet capital adequacy targets. Since they are loath to raise fresh capital in this environment, it is much easier for them to sell off assets. The highest liquidity assets, and therefore easiest to sell and buy, tend to be in USD. Also, EZ bank liabilities are mainly, rather unsurprisingly, in EUR (retail and business deposits from Europe etc).

ratso's picture

Right you are.   That is also why gold and gold ming stcks are selling off.

Threeggg's picture

Nothing to do with tomorrows options expiry on the Gold/Silver contracts right ?

Wink, wink ~



Ghordius's picture

shhht! nobody writes here about the Au/Ag options expirations here!

no, it does not make sense - somehow Tyler is convinced that the EUR/USD "should be lower".

I am quite sure the MegaBanks want it at 1.30 for December (from their customer's propaganda)

To me, it looks like "dropping" to the level I would expect, 1.425, which is what IMHO it will reach by Easter.

Ghordius's picture

why should the ECB be "actively engaged in FX warfare against the Fed"?? The Currency War is still in it's "down" leg. And the FED is not interested in fighting an impossible "up" leg since as Global Reserve Currency it really can't - except with gold.

It's all about the US Money Market Managers, IMO. The MegaBanks want them in the EU Bonds market with, of course, CDS and lots and lots of FX hedges. Hence the furious propaganda so that they can be fleeced...

Mike2756's picture

All of the strength is in the euro and the swiss. I'd say the aussie and the loonie are better tells to where we are headed.

narnia's picture

China has a larger trade surplus with EU. They are the most likely USD to EUR converters and the biggest trader on the market.

TruthInSunshine's picture



Paraphrase of a truly wise man's words (slightly altered only to fit the context what lay ahead in the European Union, and then, the global economy, sovereign and banking funding/insolvency issues):

"First they laugh at the truth. Then they fight the truth. Then the truth wins, bitchez."


Math doesn't lie. You can't have your saving of the European Union in even remotely an approximate form as now, with a shared currency, without massive inflation for all Europeans rivaling anything they've seen since the WWII era, and making the late 1970s and very early 1980s seem positively tame by comparison.

The big institutional investors, banks and even sovereign with exposure to PIIGS+France+UK sovereign debt are now petitioning, threatening, blackmailing/extorting politicians to allow the ECB to fire up their CERN € printing machine (that The Bernank is actually envious of) so as to be able to print faster than the speed of light, allowing these entities to get out of their exposure while the € still has the ability to allow them to liquidate and diversify quickly into other asset classes before the € soon becomes the Charmin Rough Texture.

I say go Icelandic, because there's no way out of the fractional reserve banking created EU nightmare, to be replicated on a global scale, without pain, and investors should bear losses first and foremost (you know, it's a quaint concept that investors should have to swallow losses, even though investment is subject to risk, when brilliant people like Hank Paulson & The Bernank refuse mandating haircuts, instead insisting that taxpayers, small and mid-size businesses, savers and the very responsible citizens pay the price, via subsidization and inflation, for the wretched excesses of governments, Wall Street, imbecilic 'too-big-to-fail' large banks [soon to be too-big-to-save] and the investment/financial sector in general).

This volatility signals that damn fork in the road they've been trying to not come to has arrived.

Good luck, bitchez. Hedge accordingly if you've not done so.

Antifaschistische's picture

Re: End the Fed "I say go Icelandic, because there's no way out of the fractional reserve banking created EU nightmare...and investors should bear losses first and foremost.

You're 100% correct, but here's why this won't happen.

Governments don't tax losses.

Governments are incentivized to force capital gains upon the masses, thus extracting extra taxation with devalued currencies.  This is why the market is not allowed to punish investors who’ve invested unwisely. We must feed the beast.

Caviar Emptor's picture

Kuwait next flashpoint. Riots last month (kept very quiet in MSM) is what provoked Obama to announce we're "pulling out of Iraq". Guess what. We're pulling in to Kuwait

onarga74's picture

We're going to nuke Iran first then get to the more important things like Kuwait and Belize.

swanpoint's picture

soaring, bitchez!

Odin's picture

Nah, just a glitch in the Matrix...

deepsouthdoug's picture

Thanks for the clarity.  I was trying to figure out was going on.  In this case no news means I'll hold my shorts a bit longer.   

c'mon man's picture

Soccer fans know how to riot...


DosZap's picture

c'mon man

Yep, cause their usually Snockered.

BW's picture

Dumping USD assets buying Euros.

Quintus's picture

Why would the ECB do that?  EUR/USD wasn't at any particularly dangerous tipping point.

I prefer the 'Panic repatriation' interpretation.

Captain Benny's picture

Agreed, there is some serious panic and they needed to repatriate.  Something very very very big is going on.

dereksatkinson's picture

The Fed, not the ECB, is probably doing this.

konputa's picture

No news is good news, apparently.

prains's picture

somebody just got in the hot tub without a bathing suit

Johnny Yuma's picture

Looks like the ECB is giving everyone -1's today on their comments. Lol!

greg2514's picture

I have seen everything now! Maybe GS going for 1.40 again

Dr. Engali's picture

Capital repatriation. Banks need money on their books. Lot's of margin calls. I'd fade the bounce.

DeadFred's picture

Someone's front running the US credit downgrade. My WAG

qussl3's picture

This is why i am not short this POS.

Fucking retarded no reason ping pong action.

FX brokers must love this crap.

Caviar Emptor's picture

When things begin to crumble, expect the unexpected. 

Always bad when very unexpected things happen. Market hates that

buzlightening's picture

Ezero rock solid as sponge bob square pants enjoys getting soaked.  Who didn't know it all ends in disaster and mf gobble your money was only a warning as to how fast your burnokio bux can be locked up.  In an instant; overnight.  Get out of the western bankstering system or die a horrible financial death along with it.

common_sense's picture



zonkie's picture

It is someone dumping dollar.  WTI also rose last few minutes. Has QE3 chatter intensified?

jomama's picture

surely this move must be based on fundamentals.

Zero Debt's picture

Fundamental analysis

Technical analysis

Manipulation analysis

citrine's picture

Not necessarily in that order, is it?

slaughterer's picture

Eurobonds to save Europe.  When markets start to collapse, recycle a EuroRumor.

Caviar Emptor's picture

Property-casualty group diving today, Alleghany down 7%

tomreagan's picture

Check out the 10yr treasury vs. stocks vs financial corporates today. Bank corporates are getting pummeled (as is EIB and other yankee names recently as Asia dumps in record amounts. And yes they do take down most of yankee auctions). Financials are getting smoked,the last time they were this wide 10yr Treasuries were @ 1.77%. Today, they can only muster a 5bp rally and have stalled at 1.95% while stocks are creamed. Selling to buy EUR because the EURUSD vs S&P correlation is all that matters? Hmmm?

CvlDobd's picture

I said I another thread.

A colleague mentioned that Cramer said the key to understand the equityarket is the currencies.

So stocks will not care what Currencies do from here on.

swissaustrian's picture

Weird stuff. Equities didn´t follow. Gold doesn´t count today, because tommorow is options expiry...

youngman's picture

I am thinking there should be enough demand to override the Bank raid far not....

youngman's picture

Its probably last three headlines on all it takes to make me buy more gold and silver....this market is more more economics..its Central Bank vs Central Bank...scary...and add in HFT´s and regulations...or lack thereof..sorry..I´ll stay outside and watch