- Italy hikes GDP forecast to 1.0% in 2010 from 0.7%
- US weekly jobless claims fall to 429,000, down -29,000; seasonal factors (no auto shutdown this year) may have contributed
- Empire State manufacturing survey fell to 5.1 in July from 19.6 in June
- US PPI falls 0.5% in June, core up 0.1%
- Philly Fed survey falls to 5.1 in July from 8.0 in June
- Slovokia signs EFSF accord
- US Senate passes FinReg bill, goes to W House for president’s signature
- Goldman Sachs reaches settlement with SEC, to pay $550 mln fine: CNBC
- BP apparently successfully caps Gulf well
- US equities recoup 1.5% loss, end up 0.1% at 1096
- US 10-year note falls below 3%, ends at 2.99%, 2-year note falls to 0.58% intraday, a record low
EUR/USD extended its gains during the US session, rising sharply as US data continues to suggest a very weak recovery and perhaps a double-dip is in the offing. The rally reached 1.2955 late in the day after clearing the 100-day moving average at 1.2923. That level helped cap gains for several hours before the upbeat news that BP appears to have stopped the gusher in the Gulf and Goldman has put SEC fraud charges behind it.
USD/JPY was belted lower after triggering stops below the 88.00 in afternoon trade. Sliding US yields were the major catalyst as the differential between 2-year US and Japanese rates narrowed to a mere 35 bp. We fell as low as 87.23 before stabilizing. Stops below 86.95/00 support may prove tantalizing for Sydney traders before Tokyo cranks up for the day.
Cable rallied strongly this afternoon after breaking above the 1.5400 level. The Good news from BP helped propel the rally further, taking cable as high as 1.5473 before it stalled. 1.5500/25 is monumental resistance near-term.
CAD was obliterated by continued covering of EUR/CAD shorts as well as massive USD/CAD short-covering after repeated probes below 1.0300 were rebuffed. The rally reached 1.0443 and close at 1.0380.
AUD was hit , but recovered late inthe session Traders reported some interest from investors to reestablish EUR/AUD shorts at higher levels in US afternoon trade, helping the AUD recovery losses prompted by global growth yields during the US morning. 0.8729/.8849 was the whippy New York range. We close at 0.8830.
