Nothing could be more appropriate than topping a week of surreal newsflow than what just happened with the EURUSD, which soared by 80 pips on absolutely non news, in what can be attributed to either some algo going apeshit and lifting every offer, a fat finger, or just the tried and true Bank of International Settlement stop hunt seeking to send correlated risk assets higher courtesy of a spark in upward momentum. Sadly today not even this glaring attempt to jump broad risk into the stratosphere is working. And ahead of a weekend where it is rumored Europe may reopen on Monday, we can't wait for the inevitable snapback.
What we do know for certain is that what is not driving the EUR higher, is news of another semi-bank run in post bank-downgrade Spain, only this time not at nationalized Bankia, but at Banco Santander. From the WSJ [4]:
Banco Santander SA's SAN.MC +2.97% U.K. unit lost about £200 million of deposits on Friday as jittery customers worried about the lender's financial health, according to a senior executive.
The deposit outflows on Friday, amounting to about $316 million, represented roughly 0.2% of Santander UK PLC's total customer deposits, said Steve Pateman, Santander's head of U.K. banking. Those deposits stood at £120.1 billion at the end of last year.
"We had a modestly negative day," Mr. Pateman said.
Santander UK has spent the day scrambling to soothe anxious depositors. Customers apparently are nervous about the British bank's vulnerability to Spain and its fragile banking system, and were further rattled by news coverage of a downgrade of the bank's credit rating late Thursday by Moody's Investors Service.
Customers have been visiting Santander branches and calling customer-service agents to discuss the bank's financial situation, Mr. Pateman said. Branch managers are explaining to them that Santander UK is fully independent of its Spanish parent and that the U.K. bank benefits from strong supervision by the U.K.'s Financial Services Authority, he said.
Mr. Pateman said about 70% of customers who visited Santander UK branches on Friday to discuss their concerns left without withdrawing their funds. The other 30% couldn't be convinced, he said.
"They say, 'I got caught by Northern Rock and I don't want to get caught again'," Mr. Pateman said. Northern Rock is a British bank that collapsed in 2007.

