- Philly Fed’s Plosser: QE2 policy should be reviewed
- EU may increase size of bailout fund at next week’s EcoFin meeting
- US wholesale inventories fall 0.2% in November; sales rise
- Bundesbank’s Weber: Reason for optimism on economy; too early to say fiscal crisis has passed; EU countries moving in right direction on fiscal policy
- Next round of EU stress tests in Feb/March: Barnier
- Minneapolis Fed’s Kocherlakota: Now not time to tighten; sees growth above 3% this year; comfortable with QE
- Bank of China to open CNY trading in New York
- US 10-year note yields rise 6 bp to 3.35%
- S&P 500 backs off from test of recent highs, rises 0.4%
- Commodities firm: gold up $7.50 to $1381, oil up $2 to 91.25
EUR/USD was choppy within recent ranges, slipping back to 1.2904 in New York morning trade only to rebound as high as 1.2994 as Europe headed for the exits.
Traders reported interest from Asian and European central banks to buy the dips and then turn around and sell the rallies above 1.2980…
All eyes are on tomorrow morning’s Portuguese debt auction after the ECB intervened in that market today, driving spreads tighter. Spain and Italy sell bonds on Thursday.
Jitters toward European sovereign debt have settled down after Japan confirmed it will buy 20% (about EUR 4 bln) of the EFSF debt to be issued later this month.
USD/JPY and USD/CHF both broke higher during mid-morning in the US. Stops above 83.30 were triggered, sending the buck briefly to 83.54 highs before easing. USD/CHF jumped to 0.9784, triggering stops above 0.9770. Traders continued to move out of overwhelmingly long Swiss franc positions with many crowding into long Swedish Krona positions in recent sessions.
GBP tested the top of its recent range at midday in New York, boosted by continued EUR/GBP sales and hopes for higher interest rates in the UL later this year. 1.5640 was the spike high but we close on a firm note, at 1.5620. Not a bad area to trim a few longs if lucky enough to have bought dips toward 1.5350…
AUD/USD recovered from early weakness this morning as uncertainty surrounding the terrible floods continues to cloud the Aussie outlook near-term (no pun intended). A solid rally in commodities during the US session helped prompt some short-covering, taking AUD up to 0.9885. Small stops are eyed above those highs while bids are now clustered around 0.9820/25. Small stops are seen below 0.9810.
