- ISM manufacturing index 53.4 vs 53.0 exp
- ISM employment component at 56.1 vs 53.2 prior — highest since June
- FT: Leaked EU documents show Italy may have to cut deeper
- Bundesbank denies rumor of halt on sovereign collateral
- Several firms downgrade Q1 growth forecasts
- Fed’s Fisher: Economy improving, premature to talk about tightening
- Fed’s Bullard: Global inflation may drive US prices higher
- Fed’s Pianalto: Removing accommodation prematurely could break recovery
- BOC’s Carney: inflation and growth both higher than expected
- Italian Q1 deficit lower than last year
- Oil touches lowest since mid-Feb then shoots higher past $105
- S&P 500 up 0.7% to 1418, touches fresh post-crisis high
Early concerns were fueled by a report (later denied) that the Bundesbank not accepting peripheral debt and concern about the HSBC China PMI. Sentiment began to pick up at the US stock open and was sustained by the ISM data.
EUR/USD hit the daily lows as the US opened and continued sliding to 1.3278. The decline was reversed as quickly as it occured, springing the pair back to 1.3338 before it settled into the regular US-afternoon chop.
Broad yen strength was outside of the broad risk profile of the market. Declining Treasury yields also kept the pair under pressure even as broad risk appetite improved and large option expiries in USD/JPY at 82.00 also contributed.
CAD was the best performer in US trading as USD/CAD slumped from near-parity to a two-week low at 0.9890 on the back of oil and commodity price gains.
