- US weekly jobless claims fall 25,000 to 409,000
- US existing home sales fall 0.8%; weaker than expected
- Philly Fed manufacturing survey falls to 3.9 in May from 18.5 in April
- US leading indicators fall to -0.3% in April from +0.1% in Mach
- France’s Lagarde odds-on favorite to take helm of IMF
- S&P cuts Spanish region of Catalonia
- Fed’s Dudley: Moderate economic recovery falling short of mandate
- US 10-year note sheds early yield gains; reaches 3.24% intraday; closes at 3.17%
- Oil falls $1.63 to $98.50; Gold bounces from trend support again
- S&P 500 rises 0.2%
EUR/USD followed a familiar pattern, falling in the morning on Greek worries before bouncing back. We broke above the 55-day moving average at 1.4296 around midday and triggered stops up to around the 1.4325 level before falling into a quiet consolidation. The big drop in US yields and the horrible US economic data weighed on the dollar across the board. Traders fear the Fed will stay lower for longer…
USD/JPY rallied strongly along with US yields early in the day, testing the 100-day moving average at 82.22 before failing spectacularly at that level. The poor data and subsequent drop in yields killed the rally in its tracks. We end the day near session lows, now at 81.50.
Similar story for USD/CHF which has been closely correlated with yields on an intraday basis of late. It ends at 0.8805, not far above important support around 0.8785.
Cable was weighed down early in the day by heavy selling of pounds on the crosses. EUR/GBP was in big demand during the London afternoon. Once the cross buying relented, cable took off like a shot. It bounced from 1.6140 to 1.6235.
AUD/USD range-traded for much of the US session but edged higher in its range at the end of the day. Russian demand for Aussie for reserve purposes was rumored during the London morning.
