- CRB falls 4.9%
- Silver falls 12.6%, gold falls 3%, copper falls 3.7%, oil falls 10.2%
- Trichet signals no hike in June sending German yields sliding German 2s fall nearly 20 bp
- US weekly jobless claims soar 43,000 to 474,000
- Asian central banks buy EUR/USD heavily in 1.4650/1.4700 area
- Fed’s Kocherlakota: Fed should prepare to hike rates this year
- S&P 500 falls 0.90% to 1335
- US 10-year note falls 6 bp to 3.16%
Where do I begin to tell a story of how great a fall can be…
Commodities have been under pressure for several session but when the hawk’s hawk at the top of the ECB decided to hold off from hiking rates at the ECB’s next meeting, commodity bulls got severely spooked.
EUR/USD dropped like a stone, falling from 1.4845 to as low as 1.4510 before finding the slightest bit of support. Talk did the rounds of a 1.45/1.50 DNT, helping to stem the decline. 1.4490/00 is next support, followed by uptrend support at 1.4416.
AUD/USD slumped as well but not as badly as one would have expected given the commodity-centric nature of today’s decline. Traders say short AUD positions against EUR were a source of bids for the AUD as it came lower and the positions were unwound under duress. AUD/USD closes below important support at 1.0580. 1.0532 is next support, the 38.2% retracement of the 0.9739/1.1021 rally.
USD/CHF rallied strongly today despite the rise in risk aversion which helped drag EUR/CHF lower. EUR was lower versus virtually everything today. 0.8578/0.8713 was the USD/CHF range in NY and we close near the highs.
Even USD/JPY rose a touch despite a slide in EUR/JPY. 79.57/70.35 was the US range. We close at 80.21. EUR/JPY fell from NY highs of 118.55 to 116.15.116.55 was last.
A sharp fall in EUR/GBP (nice call Citi!) helped cushion the blow to cable poised by the 1.4% rise in the dollar index. 1.6516 was the pre-ECB high for cable; 1.6361 the late afternoon low.
