- US nonfarm productivity rose at a 6.4% annual rate in Q2, the fastest pace in six years; unit labor cost data retracted after BLS discovers errors
- US wholesale inventories fall 1.7% in June, much greater than expected
- OPEC keeps forecast for demand stable for 2010; says dependent on global growth
- US auctions $37 bln in three-year notes at 1.78%, bid-to-cover at 2.89, 62% of issue taken by central banks; strong
- Obama: Business investment coming back but economy not out of woods
- US 10-year note falls 4 bp to 3.67%, oil falls $1.24
- S&P 500 falls 1.3%; below 1000
Cross trades dominated US morning flows as heavy unwinding of AUD/JPY and CAD/JPY longs sent the components gyrating. USD/JPY dropped as low as 95.77, where it traded twice, before it was able to find its footing. Rebounds have been unable to overcome the 96.10 level in afternoon trade.
USD/CAD spiked as high as 1.1046 before protection of a barrier option at 1.1050 helped contain the rally. AUD/USD fell as low as 0.8276 with rebounds capped in the 0.8310 level. 0.8320/30 is important resistance; a break back above will ease the immediate downside pressure on Aussie. This will be the first close below the 10-day moving average in AUD in over a month, a clear sign of flagging momentum.
EUR/USD fell as low as 1.4110 in New York this morning but ongoing talk of Chinese buying on dips helped keep the single currency essentially range-bound. Dealers reported fresh buy orders clustered just above the 1.4100 level on their books today.
Cable saw sales by an Asian central bank this morning but managed to recover and spend most of the session in a nondescript 1.6450/1.6510 range.
