• Initial jobless claims 381K vs 370K exp; prompting jobs optimism
  • Chicago PMI 62.5 vs 61.0 exp
  • US pending home sales +7.3% in Nov vs +2.0% exp
  • EUR/USD hits 15-month low but rebounds
  • Ambrose Evans-Pritchard stirs the pot on EUR money supply
  • Fed’s senior loan officer survey sees broad credit tightening
  • KC Fed manufacturing index -0.8%
  • Poland intervenes to boost zloty
  • Italian 10-year yields rise 3bps to 7.08% after auction
  • US 10s fall 3bps to 1.90%
  • Gold hits lows since July then rebounds to nearly unchanged
  • European equities rise 0.9-1.3%
  • S&P 500 gains 1.0% to 1262
  • AUD, JPY lead; GBP, USD lag

The Italian debt auctions were the top story of the day. After a good result in Wednesday’s bill sales, expectations were high but the demand didn’t materialize. As a result, EUR limped into US trading at 1.2887 after hitting an annual low of 1.2858. But it was all higher from there as US stock markets erased most of yesterday’s losses. EUR/USD last traded at 1.2963 — more than a cent off the lows.

The broad tone of markets was disjointed and that spilled over into FX. Although AUD was the top performer, it wasn’t exactly ‘risk on’ as JPY was next best. USD/JPY has fallen nearly 40 pips since hitting 78 yesterday.

Rumors of gold selling at funds continued to circulate and stops were tripped as it fell to $1522, below key support at $1532. But the precious metal spent only 4 hours below the critical level before rebounding to close at $1546.