- Risk trade hammered in London, largely reversed in US trade
- US retail sales rise 0.5%, slightly below expectations
- US weekly jobless claims fall 44,000 in latest week
- US PPI rises 0.8% in April
- IMF’s Borges: Need competitor to dollar for global monetary rebalancing; euro the alternative
- EB’ Coene: Very hawkish
- UK NIESR: GDP seen at up 0.3% in 3 months to April from 0.5% from 3 months to March
- Moody’s: Outlook for US banks remains negative but improving
- Dutch FinMin: Draghi would upset north/south balance on ECB board
- Oil trades in over $5 range, ends up 0.75 at $ 98.95
- US 10-year note yield rises 0.4% to 3.226%
- S&P 500 rises 0.5% to 1349
EUR/USD reverses its early losses, closing back above its 38.2% retracement at 1.4157 after sliding as low as 1.4121 in London. Stops above 1.4235, 1.4250 and 1.4270 were triggered on a late European short-squeeze as oil bounced $5 from its intraday lows and sent markets scrambling to cover risk-averse trades. We end the day at 1.4240; below the former important support level at 1.4250/55, keeping downside pressure intact.
USD/JPY was supported by firmer US yields and firmer risk appetites on dips. Prices fell as low as 80.70 intraday but losses were limited by the aforementioned factors. We close at 80.90.
GBP/USD remains caught in the risk caldron. EUR/GBP rises and falls with EUR/USD which rises and falls with commodities and equities. The NIESR GDP data shows the UK recover continuing to lose steam amid austerity.
AUD/USD shadowed EUR/USD, losing ground during the London morning only to rebound as later in the session as commodities jitters settled down.
