- Eurogroup head Juncker chides Germany for too much stimulus
- Case-Shiller home price index -11.3% in August versus expectations for -11.9%
- Richmond Fed index falls to +7 in October from +14 in September
- US consumer confidence falls to 47.7 in October from 53.1 in September: Conference Board
- Daimler says EUR/USD above 1.50 a cause for concern; 60% hedged
- IBM announces $5 bln stock buyback; causes Dow to outperform S&P
- BOC Governor Carney: US economic recovery to be substandard; threatens unconventional measures to achieve inflation target; intervention without policy shifts does not work in long-term.
- US sells $44 bln in 2-year notes at 1.02% yield; bid-to-cover 3.63
- Oil rises $0.62 to 79.31; Gold rebounds from lows to end at $1039
- S&P 500 falls 0.33% to 1063
The euro fell further in US trade, losing support at the 1.4845 level as a slump in US consumer confidence provided a fresh catalyst to reduce risky trades. The euro was singled out for punishment as commodity currencies held up fairly well and stocks and commodities turned in mixed performances rather than the highly correlated trade we say on Monday as all the risk assets fell sharply.
EUR/USD has retraced 50% of the rally it took nearly the entire month of October to compile in just over 24 hours. Truly a case of up the escalator, down the elevator….
EUR weakness helped drag EUR/JPY from recent highs down to the 135.65 area in New York. USD/JPY was dragged lower as well, slipping back to the 91.70s after failing to overcome 92.30 resistance today despite dollar strength. A slump in US bond yields helped undermine USD/JPY as US Treasuries rallied in price after a very strong 2-year note auction. 10-year notes fell from 3.51% yield ahead of the auction to 3.45% at the close.
The BOC Governor continued to warn the market that he may need to resort to unconventional measures to weaken the CAD and achieve the BOC’s inflation target but the market has hear it several times in recent days and the message is beginning to pay diminishing returns.
Good amounts of AUD/CAD selling were seen today but AUD/USD held up quite well amid talk of very strong demand on dips from Asian central banks throughout the day. AUD dipped to 0.9122 intraday before ending at 0.9150. USD/CAD eased to end at 1.0665 from just above 1.07 despite Carney’s quantitative ease talk.
GBP/USD was a bystander in New York after leading the parade in London. Price action remains brutal in cable. EUR/GBP is making a tad more sense as the EUR experiences profit-taking across the board, falling to 0.9028 during the New York afternoon, supporting Cable, which ended at 1.6375.
