- Google earns $7.64 versus expectations of $6.69, just after the bell
- US PPI rise 0.4% in September, ex-food and energy up 0.1%
- US weekly jobless claims rise to 462,000 from 449,000
- US trade deficit widens to $46.4 bln in August
- St Louis Fed: QE will be ineffective in lowering interest rates
- SARB the latest to complain about low rates in developed markets prompting inflows into South Africa creating an overvalued rand
- Bini-Smaghi: Excessive currency volatility is to be avoided; notes USD weakness not EUR, JPY strength
- US 30-year bond auction goes poorly, yields rise
- White House reiterates China must do more on CNY, cooling speculation of any potential deal to trade Fed QE for a significant CNY revaluation
- S&P 500 loses down 0.4% ater falling more than 1% intraday. Earnings beats by Google and AMD lift futures after the close
The dollar reached its worst level during the London session and spent the US session backing and filling ahead of tomorrows speech from Bernanke at a Boston Fed conference. Traders hope he will put some meat on the bones of the market’s hopes for quantitative ease.
EUR/USD pulled back to roughly test support at 1.4030 (1.4036 the low) after yields rose following the US 30-year bond auction. We bounced strongly there after and rallied into the 1.4080s after the Google news. Options-related selling (linked to an expiring 1.4100 digital) helped cap gains during the US morning while large 1.4125 offers are eyed on rallies from options players, traders report.
UISD/JPY enjoyed a modest rally during the US session, trading from an early low of 82.09 to a an intraday high of 81.68 after the bond auction. Resistance remains at 81.65/70 and again at 82.00. Real money was a steady buyer of USD/JPY again today, for a third straight session.
USD/CAD rebounded today from below parity on demand from Canadian corporates as well as a dovish report from a US think-tank. We squeezed as high as 1.0075 and end the day at 1.0050.
AUD/USD retrenched for much of the US session, drifting back to 0.9900 after failing to overcome 1.00 in London. Hedge funds were rumored profit-takers during the US morning. We end the session at 0.9935/40 as risk appetites improved on the late earnings reports.
Cable ends the day above 1.6000 after spending the US session in a tight-for-cable 1.5975/1.6020 range.
The US opens with a bang tomorrow. Bernanke speaks at 12:15 GMT and retail sales and CPI follow at 12:30…
