- US CPI unchanged in February; ex-food and energy up 0.1%
- US jobless claims fall to 457,000
- Philly Fed survey rises to 18.9 from 17.6
- US Leading indicators +0.1%
- Speculation grows that Greece will ultimately appeal to the IMF for aid
- IMF says no request for aid from Greece, expects EU to act
- Greek PM: Will not ask IMF or EU for aid
- SNB’s Danthine: Swiss business and consumers should prepare for higher interest rates and market FX rates. EUR/CHF plunges.
- US 2-year note yields rise 4 bp to 0.96%; 10-year notes 2 bp to 3.67%
- S&P nearly unchanged at 1166, gold +$6 to $1125; oil, -$0.91 to $82.00
EUR/USD found support several times in the 1.3650s but prices gave way in late New York morning trade, triggering stops below 1.3640. The rapid declined spawned a rumor that the Fed would raise the discount rate at midday in New York. The rumor proved unfounded and EUR/USD finally stabilized in the 1.3586 area, just above the 61.8% retracement of the 1.3433/1.3819 rally. Rebounds failed to retake the former 1.3650/60 area where the market was supported earlier in the session.
USD/JPY overcame sell orders in the 90.40/50 area and triggered stops which led to a quick rally toward a heavy zone of exporter selling between 90.70 and 90.80. Prices reached 90.81 at the height of the Fed hike rumor but prices quickly reversed field. USD/JPY pulled back as low as 90.16 in afternoon trade in New York. Overnight there was talk of Kampo buying in the 89.90 area, it should be noted.
EUR/CHF was the other story of the day. It fell like a stone as new SNB board member Danthine all but announced that the SNB will stop intervening to weaken the franc. We fell from 1.4470 to a low of 1.4355 level before stabilizing. We’ve not seen levels that low since the post-Lehman global market meltdown.
