- US housing starts jump 22%, mostly multi-family homes; permits rise 3%
- US producer price index rises 0.1%/core up 0.2%
- Fed delays change in bank capital rules by 2 years
- IMF revises world growth outlook dramatically lower, now seen down 0.6% this year. Japan seen down 5%, Europe 3.2%, US, 2.6%
- Eurogroup’s Juncker: No need for further stimulus; no Eurogroup country will become insolvent
- Germany to issue an additional EUR 20 bln in debt this year
- Merkel/Sarkozy to EU; Regulation top G20 priority
- Weber: No EZ breakup, ECB cannot be central counterpart in Money markets forever
- Summers: Obama administration will be “creative” in recovering AIG bonuses
- US equities close up 3.2%; oil closes near $49, highest for 2009, 10-year notes close at 3% yield; gold bucks reflation trend, holds at $915.
EUR/USD slipped in early US trade as bank analyst Meredith Whitney cast down on bank earnings. Stops below 1.2950 were triggered, taking the pair down to 1.2932. Prices recovered from there and were supported for most of the afternoon by a bout of reflation. Commodities firmed along with stocks and bond yields backed up. The buck slipped across the board but mostly against the euro. It still holds below overnight highs were Chinese were rumored in Europe, around the 1.3030/35 region.
USD/JPY reached 99.00, where Chinese offers were rumored before edging down to the 98.50 as the stock market surged. Good bids are rumored at 98.30.
Cable ran into stoploss selling as Meredith Whitney held forth on banks. Prices recovered modestly, into the 1.4040s in the afternoon but EUR/GBP buying kept the cable recovery tepid. Strong support from across the economic/central bank/political spectrum in the eurozone for bailouts of any members in trouble is helping underpin the euro on the crosses in addition to the dollar.
