sovereign debt

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Get more news and analysis at http://fxtimes.com Summary: The Euro was pressured today as the European Commission said it would go through with having senior bondholders take some kind of cost in a any bank failure. Any talk of haircuts has hurt the EUR. We look at the EUR's slide and at US jobless claims, and some consolidation in USD pairs ahead of NFP. Partial Transcript: Sovereign Debt Worries Resurface The European Commission will continue today with a plan to spread the cost of bank failures to senior bondholders, the Daily Telegraph reported. The EU may give regulators power to block new products and limit trading risks at banks deemed too big to fail, as part of plans to protect public finances from future financial crises. We know that any talk of haircuts for creditors is bad news for the EUR. China to Buy $7.9 bn of Spanish Debt Second development, Chinese Vice Premier Li told Spanish Prime Minister Jose Luis Rodriguez Zapatero during a meeting in Madrid on Wednesday that China "was willing to buy as much Spanish debt as its Greek and Portuguese debt holdings combined, that is some six billion euros ($7.9 billion)," it said. Spain's central government must raise about Euro 170 billion this year on top of Euro 30 billion by the country's regional government's according to debt ratings agency Moody's. The market fears that creditors will ask for higher yields and we could have another situation in which a loan rescue deal is needed like the ones we had for Ireland and Greece. Analysts say that stabilising the economy in the EU -- the top destination for China's exports -- is in the interest of the Asian country which still largely depends on exports to drive economic growth. Spain has vowed to lower its public deficit from 11.1 percent of economic output in 2009, the third-highest level in the EU after Ireland and Greece, to an EU limit of 3.0 percent by 2013. The have announced plans and are implementing reforms to slash spending and raise taxes in order to rein in its ballooning public deficit. Germany Factory Orders Surge, Show Divergence in Euro-Area Economies German November industrial orders surging to 5.2% against 1% expected --driven by strong demand from abroad, while euro zone data is mixed, with November retail sales disappointing at -0.8%. This shows the bit of divergence that's going in in the EURo=-zone as the core countries like Germany grow at a strong pace while those in the periphery languish. EUR/USD - EUR Extends Slide on Sovereign Debt Worries We see EUR/USD extending its slide from yesterday, falling below the 1.31 area to 1.3080 where the Euro found some buying interest. We now test our les from late December, A break here means we target the 1.2965 pivot from December 1st. Other Euro Crosses Slide as Well The EUR/CHF pair retraced it steps after rallying the past two sessions. We saw the pair move back down to 1.26 in today's trading as we had a pick up in concerns over sovereign debt. The EUR/CAD slid below its support at 1.31, and we hit an intra-day low just below 1.30. Selling the EUR against the CAD will continue to be a popular trade it seems to start 2011. Another trade picking up some steam is selling the Euro against the Pound. After a double-top pattern to start the week, the EUR/GBP pair extended its losses below the 0.8450 area. We look to target the 0.8350 in the short term. GBP/USD - Choppy Consolidation Speaking of the GBP, the Pound continues its sideways consolidation against the USD. We see that the pair was higher overnight, but then was knocked back from the 1.5560 level, dropping down to 1.5465 following a weak services PMI report. However, in the NY session, we do see some USD weakness which has helped the pair to recover back to its highs. Overall, we remain rather choppy and stay sideways as we had mentioned in yesterday's video. US Jobless Claims - Claims Rebound a Bit Us jobless claims data came in higher than expected with 18K new claims for th...