- ECB holds rates at 1.00% but Draghi says some members wanted cut
- Draghi sees higher risks to eurozone economy
- Draghi: GDP seen -0.5%/+0.3% in 2012
- Draghi: Some eurozone problems have nothing to do with mon pol
- FT: Europe trying to lure Spain into a limited rescue
- Stocks rally most in 2012, S&P gains 2.3% to 1315
- Beige Book upgrades economic assessment to ‘moderate’ growth from ‘modest-to-moderate’
- Fed’s Williams: Must stand ready to do more if needed
- Fed’s Lockhart: If forecasts deteriorate, more accommodation may be needed
- DJ: ESM could recapitalize banks but home state would retain liability
- AUD leads, JPY lags
Speculation that an aid package for Spanish banks is on the way sparked a rally in the euro and risk assets despite the lack of indications about central bank help. The euro stayed close to 1.25 in early European trading then fell to 1.2440 as Draghi’s comments crossed. A late rally in European equities spilled over to risk assets and the US dollar slumped ahead of tomorrow’s testimony from Bernanke.
USD/JPY was locked between 79.00/30 despite a jump in 10-year Treasury yields to 1.66%.
USD/CAD fell below 1.03 and continued lower to 1.0278.
Gold plunged ahead of the Beige Book, down to $1617 from $1640 on diminished QE expectations, something that could be the story in the day ahead.
