- Japan’s Kan: BOJ and government to work together on JPY
- Canadian current account deficit widens to record C$ 13.1 bln in Q3
- UK inflation expectations rise to 2.1% in November from 2.0% in October
- Canadian budget deficit C$ 28.6 bln April/September period
- US Treasury: Monitoring Dubai debt situation; European banks more exposed than US: CNBC
- S&P 500 closes down 1.7%, well above 4% decline implied by futures trade overnight
- Oil ends down $2 at $75.85, up from $72.39 lows; Gold ends at $1172 from $1138.20
The shortened New York trading day saw global markets recoup much of their recent losses as the Dubai debt situation is seen contained in the near-term. Many assume a bailout will be arranged with Abu Dhabi over the weekend, though a second round of contagion could play out next week if no rescue is forthcoming.
EUR/USD fell through long-term uptrend support at 1.4855, slipping to 1.4830 before rebounding sharply. The rebound reached 1.4990 before stalling. Asian central bank buying was seen at 1.4830 and again at 1.4890.
USD/JPY rebounded strongly with the combination of dwindling risk aversion and jawboning from Japan’s Kan helping boost the buck back to 87.00 after making 14 year lows below 85.00 overnight. 87.11 is important resistance for the greenback near-term. Trailing stops lie just above that level.
AUD, CAD and GBP all recovered large percentages of overnight losses ending firmer from opening levels at 0.9060, 1.0625 and 1.6480 respectively.
