- Weekly us jobless claims rise to 444,000 from 437,000 4 week moving average 440, 750
- US retail sales fall 0.3% in December
- Trichet: Rates appropriate; no collateral rule changes for any country; strong dollar important, as Bernanke and Geithner have said; talk of Greece leaving Euro “absurd”
- Strauss-Kahn: Global recovery to be slow, mostly on government spending; Euro zone can aid Greece if needed, not IMF
- Estimates of Freddie/Fannie losses: $448 billion
- US airline security beefed up after new Al Qaeda threat
- US sells $13 bln 30 year bonds at 4.64; bid to cover 2.68
- S&P 500 ends at 15 month high of 1148, up 0.25%
- Oil falls $0.50 at $79.15, gold rebounds to $1143
- US yields fall on weak data, good auction. 10-year notes fall 7 bp to 3.73%
EUR/USD dipped to 1.4447 intraday with the ECB stopping far short of offering anything like a bailout to Greece. In fact Trichet offered quite the opposite, saying all countries would need to meet the ECB’s collateral rules for their government bonds to be accepted for collateral. Greek bond yields spiked higher, as did the cost of credit default swaps.
The EUR recovered at midday as traders circulated an analysis which showed the US taxpayer could be on the hook for about $450 bln, an eye-popping figure.
EUR stalled at 1.4520 on the rebound and died around 1.4500 late.
USD/JPY was undermined by falling us yields after another round of heavy spec buying overnight. USD/JPY dipped as low as 90.85 before rebounding late in the day to 91.12
Cable seems to be the trendy new safe-haven with EUR/GBP falling every time there is a negative Greek headline. Cable chewed through central bank offers in the 1.6310-20 area and rose as high as 1.6348. 1.6410 is the near-term target.
AUD dipped late this morning along with gold to the 0.9280 level but soon rebounded and continues to consolidate above 0.9300. Reports of RBA selling around 0.9330/35 made the rounds earlier in the day, said to be a smoothing operation.
