- ISM rises to 35.6 in January from 32.9 in December. First rise since June 2008.
- Personal spending falls 1.0%, personal income down 0.2%; Savings rate rises to 3.6%.
- US construction spending down 1.4% in December
- EU’s Almunia expects UK to join euro in future. US stimulus package clearly protectionist, relations to improve with US in coming years.
- Bank bailout package not expected from Treasury until next week.
EUR/USD rebounded during the US morning as severe risk aversion was calmed by a rare uptick in the ISM survey. While still showing severe contraction in the manufacturing sector, the rate of decline slowed some in January. EUR/USD surged through 1.2800 after the news and reached 1.2898 late in the US morning. Markets were thin owing to the post-Super Bowl hangover as well as a big snow storm in London. EUR/USD ended up at 1.2845 at 21:00 GMT.
USD/JPY reached 90.01 before stalling with Japanese offers eye on strength. Offers are seen from 90.00 to 90.20. Stops lie just above that level. Buyers are seen on dips now 89.50.
Stocks turned down late in the US afternoon dragging EUR/USD back down while oil and gold turned lower late as well. Gold fell from $928.00 session highs to $903 at last look. US long rates fell 10 bp to 2.73% at the 10-year maturity. Stocks gyrated all day and closed mixed. S&P 500 closed flat while the Dow fell 0.8% and the Nasdaq rose 1.2%.
