EUR/USD
The pair settled lower after sources have commented that Spain is unlikely to seek ESM aid this year, and the ECB are not in a hurry to commence bond-purchases under their OMT program. The news translated into selling across the curve in Spanish debt markets, bringing the Spanish 10yr yield to multi-month highs of 5.8%, and widening the SP/GE 10yr yield spread towards 450bps, and bringing EUR/USD to two-month lows. Separately, the ECB left its key benchmark interest rate unchanged at 0.75%, as expected, deposit rate unchanged at 0% and marginal rate unchanged at 1.50%. Dec Euribor saw volatility following the rate decision, with an immediate move to the downside as there was an outside chance of the ECB cutting the deposit rate, however this was quickly pared. During the press conference, Draghi failed to indicate that more easing will be announced which in turn weighed on the pair.
GBP/USD
Risk averse sentiment, stemming from the reports that Spain is unlikely to seek ESM aid this year failed to weigh on the pair, which settled little changed after the Bank of England voted to keep the benchmark borrowing rate and QE asset purchase target unchanged at 0.5% and GBP 375bln respectively. As there were outside bets that the MPC could move to expand their asset purchases, Gilt futures saw immediate weakness, with the 30yr Gilt falling to fresh session lows, and the 10s/30s spread tightening. In other UK related macro news, UK October permanent job placements rise to 55.0 from 49.7 in September according to KPMG/REC, marking the highest reading in permanent jobs in 17 months.
USD/JPY
The pair settled lower, as risk averse sentiment buoyed investor demand for safe-haven assets. There was little in terms of Japan specific commentary, but both the BoE and the ECB voted to keep their respective monetary policies steady.
