- Chicago Fed’s National Activity index drops to -0.46 in November from -0.25 in October
- ECB supports liquidity test in new stress tests
- France’s credit rating in focus: Bloomberg
- ECB buys EUR 600 mln in bonds in latest week; total EUR 72 bln
- Moody’s puts Spanish banks on review for downgrade; Government may not have sufficient resources to support banking system
- Deutsche Bank affirmed at AA- by Fitch
- South Korea complete live fire drill; no move from North Korea
- S&P 500 closes at 2-year high of 1247; brushes 1250
- US Treasury yields end unchanged, reversing early dip to 3.25%
EUR/USD remained pressured by sovereign debt woes. Bloomberg stirred the put with a story on French CDS reflecting a much lower rating than the AA it now enjoys. News that Moody’s had put Spanish banks on review for a downgrade on fears that the government does not have sufficient resources to rescue the ailing cajas helped push EUR/USD briefly below 1.3100. We fell to 1.3094 before rebounding very modestly. Afternoon rallies barely reached 1.3130. The 200-day avg at 1.3102 survives a test, however.
An example of how dire the European sovereign debt situation remains is the insatiable demand for CHF. Traders pushed the franc to all-time highs of 1.2637 versus the euro, this morning. USD/CHF remains offered on rallies, as a result.
USD/JPY was modestly undermined by intraday weakness in US bond yields but support at 83.62 held the line. W traded quietly in the 83.70s for much of the US afternoon as yileds rebounded to the low 3.30s in the 10-year note.
Cable saw selling from real money accounts today (As did EUR/USD) and ends just above the 1.55 level.
AUD/USD held up well, trading choppily between 0.9920 and 0.9950. USD/CAD was the victim of a short-squeeze, rising briefly above 1.0200 as the 1.00 area remains supported. Weaker oil prices intraday helped fuel the surge but they have since reversed. Crude closes up 0.80 at $88.80.