• ADP employment report shows US created 170,000 private sector non-farm jobs; slightly below forecasts
  • Fed’s Plosser: Little justification to further ease monetary policy
  • Belgium falls into recession as Q4 GDP slips 0.2%
  • Canadian PMI falls to 50.6 in January from 54.0 in December
  • Fitch: Italy should focus on growth, not austerity: concerned about disorderly Greek default
  • ISM index rises to 54.1 in January from 53.1 in December; slightly below forecasts
  • US Treasury” Prudent to consider auctions with negative yields
  • Buba’s Weidmann: Fiscal Compact not the basis for fiscal union; will probably be loosely implemented
  • Obama proposes $5-10 bln in mortgage relief
  • WSJ: EU may water down bank capital rules
  • Monti: Italian yields need to fall and will fall
  • DJ: Rates on existing Greek bailout loans may be lowered as part of PMI package
  • S&P 500 rises 0.9%; Milan rises 2.75%
  • US 10-year note yields rise 3 bp to to 1.83%; Italian 10-year yield falls 27 bp to 5.70%
  • WTI falls $1 to $97.45; Gold rises $6 to $1743

EUR/USD and the rest of the risk currencies opened on a strong note in the US and rallied after ISM confirmed that the US recovery remains on a moderate growth track. EUR/USD reached 1.32187 and AUD/USD 1.0741 before stalling. Combined with strong PMIs overnight and hopes for more monetary accommodation from the major central banks helped send equities up as well.

EUR/USD sputtered above 1.3200 once again and dipped as low as 1.3145 at mid-afternoon in NY to squeeze out a few intraday longs. Sellers are seen bunched in the 1.3220/50 area, making the topside more of a slog than a sprint. We end at 1.3160.

USD/JPY slipped as low as 76.02 in early NY trade before bouncing to the low 76.30s as US yields backed up intraday and equities rallied. Traders note the usual talk of Japanese vigilance on FX rates but paid little attention.

GBP/USD closed well above recent range tops in the 1.5770 and is now said to be a buy on dips toward that area of support near-term.

AUD/USD stalled ahead of rumored 1.0750 barriers and closes at 1.0700.

EUR/CHF remains a topic of conversation with traders playing “will they or won’t they” with the SNB regarding defense of their 1.2000 peg. Of course they will.