- Greek PSI deadline passes
- Rumors/reports centered around 80-85% participation
- Officials indicate over 75% participation
- Results to be released at 0600 GMT
- ECB holds rates at 1.00%, as expected
- Draghi hikes inflation forecast, cuts on growth
- Draghi: no discussion of rate cuts
- Draghi: sees many signs of a return of confidence
- Initial jobless claims 362K vs 352K exp
- Bank of Canada holds at 1.00%, as expected
- BOC: inflation firmer than anticipated
- US Challenger job cuts 51.7K vs 53.5K prior
- US household debt rises 0.3% in Q4
- Portugal says it will not ask for more money, time
- NZD and EUR lead, JPY lags
- S&P 500 gains 1% to 1365
EUR/USD into the session at 1.3250. Draghi’s initial forecasts about high inflation ratcheted EUR/USD up to 1.3274 (above the 100 dma) but the clarification that this is due to high energy prices reversed the trade. Adding to the downward momentum was the cut in growth forecasts, even if Draghi noted signs of stabilization. That sent the euro to a press-conference low of 1.3225. After the press conference, semi-official rumors or higher and higher PSI participation sparked a rally as high as 1.3291.
USD/JPY started at 81.77, the highs of the day. Trading was choppy, slipping down to 81.32 as stocks fell at the open on European growth concerns. Optimism about the debt swap renewed the climb to 81.65.
USD/CAD promptly droppped 35 pips to 0.9920 after the BOC, after a brief bounce it continued lower, falling below 0.99 before settling just above.
