We already reported earlier [6]that the only bid in the overnight session, aside from that of central banks of course, was courtesy of hopes that Russia would victoriously step in and gloriously deja vu bail out Cyprus from the clutches of a despotic (for lack of a better word) Germany. This happened moments before Russia explicitly denied any agreement between Russia and Cyprus was reached. So, in the aftermath of a brief glimpse of reality courtesy of FedEx which slashed its economic outlook across the board leading some to expect an outright decline in full year S&P earnings, what is a foundering insolvent status quo regime to do? Why regurgitate the same old already refuted rumor of course. Sure enough [7]: "Kathimerini Cyprus reported that an agreement has been reached in principle for Russian investors to buy Cyprus Popular Bank (Laiki) in a deal that would reduce Cyprus' funding needs by 4 billion euros." Unsourced, unfounded, idiotic (because why would Russia buy a bank which will be promptly rendered insolvent by the deposit bank run that follows moments after it finally reopens). That was enough, however, to send the EURUSD soaring....
[8]
... and for us to comment on this as follows:
Here we go again with the European rumors ramping EUR, denied 20 minutes later
— zerohedge (@zerohedge) March 20, 2013 [9]
We overestimated the response time: 10 minutes later, just as we predicted, all has been denied:
- CYPRUS GOVERNMENT SPOKESMAN DENIES REPORTS OF DEAL TO SELL CYPRUS POPULAR BANK CPBC.CY TO RUSSIAN INVESTORS
And EURUSD tumbles:
[10]
Welcome back European pre-denial rumormonger: we missed you.