- IMF: European banks most vulnerable to fund pressures, crisis
- ISM non-manufacturing index rises to 53.2 from 51.5; better than expected
- Soros: Europe setting in motion a deflationary spiral via austerity; Japanese intervention justified
- Chicago Fed president Evans: Fed can be much more accomodative; view not data dependent; we’re there
- Split over timing of exit strategy on ECB board: MNI
- S&P 500 rises 2.1% to 1161; gold closes at record $1340; US 10-year note unchanged at 2.47%
EUR/USD rallied from the get-go in New York as traders viewed the BOJ cut overnight and an number of currency measures taken by global central banks as a sign that the race to the bottom in currencies is accelerating. Uber-dovish comments from Chicago’s Evans only poured fuel on the fire, helping take EUR/USD to fresh trend highs at 1.3860. EUR/USD closes above the March 17 high of 1.3819 and now targets 1.3894, the 61.8% retracement of the decline from 1.5145 begun at the end of last November.
USD/JPY slipped briefly below 83.00 this morning but was unable to penetrate the massive stops at the 82.80/85 level. Prices rebounded quickly to the 83.30 area with real-money buyers leading the way, along with specs covering intraday shorts. The market remains mystified as to why the BOJ did not follow-up its move cut rates to zero and begin buying assets again with intervention. 82.96 was our intraday low.
AUD/USD took no prisoners today. Legions of longs were stopped out on the slide to 0.9543 in London while fresh shorts were stopped out as we retook levels above where AUD/USD traded before the RBA announcement (above 0.9680). The rally reached 0.9725 before stalling, fueled by wave after wave of buying in a broad array of commodity markets.
EUR/GBP soared with EUR/USD. Cable managed to rally but it only put in a 5-pip new high for the trend, enough to trigger a few weak stops but it was unable to maintain its perch above 1.5925. 1.5930 was the high and we close at 1.5885. EUR/GBP closes above 0.8700 from 0.8625 lows in Asia.
USD/CAD slipped lower but the move met with buying from Corporate Canada all the way down. We end the day at 1.0165 from 1.0154 lows amid talk of 1.0150 option barriers.
