Forex - EUR/USD vs GR-DE 10-Yr Yield Spread Flow - Greek premium slips, EUR/USD slides

Forex - EUR/USD, EUR/JPY Flows - Back below 1.32

 [Forex Flows]

EUR/USD broke back below 1.3200 with bids rumoured to be at the level taken on without much of a fight. Stops were tripped as the floor came out from under the pair to spark broad based EUR selling. The massive crowd of EUR shorts is the only factor standing in the way of continued weakness as Greece concerns still persist. The 1.3112 level will be a notable target on the way lower for the more committed shorts. SI

Forex - USD/JPY, EUR/JPY Flows - Kyodo: Kim Jong Il reportedly in China for 1st time in 4yr

 [Forex Flows]

Thinner markets with UK off on Bank Holiday and also Japan off till Thursday on Golden Week and China off for Labour Day. Focus remains on Greece, Eurozone concerns. EUR, EUR/JPY under selling pressure in thin markets, EUR at 1.3218-19, eye Asia low 1.3208 given, stops blw 1.3200, EUR/JPY back toward 124, eye 122.50 on EUR sales, USD/JPY 93.94-96. Some focus on Dear Leader Kim; Kyodo: North Korean leader Kim Jong Il is believed to have traveled to China on Monday, his first visit to the country since Jan 2006. Observers are closely watching what Kim, if he is indeed visiting China, will say about the stalled six-party talks on North Korea's nuclear programs and the sinking of a South Korean patrol ship in late March, which Seoul suspects was an act by Pyongyang, during expected talks with the Chinese leaders. On FX, good to watch above.WL

Forex - EUR/USD, EUR/JPY Flows - ECB suspends minimum credit rating for Greek debt

 [Forex Flows] [Central Banks]

EUR, EUR/JPY edging up on ECB's move to suspend application of minimum credit ratting threshold in collateral eligibility, suspension will be maintained until further notice. Suspension applies to all bonds guaranteed by Greek govt. ON FX, the moves by ECB means they will accept all EMU sovereign papers whatever its credit risk, and will help to limit another big knee jerk Euro selloff if other rating agencies, like Moody's downgrade Greece to junk, like what S&P did. Previously, from ECB: has decided to keep the minimum credit threshold for marketable and non-marketable assets in the Eurosystem collateral framework at investment-grade level (i.e. BBB-/Baa3) beyond the end of 2010, except in the case of asset-backed securities (ABSs). On FX, EUR/USD edging up to 1.3245-50 from 1.3230-25, EUR/JPY to 124.45-50, vs lows of 124 earlier, but interest still to sell EUR on rallies for test of 1-yr low 1.3114.WL