- Fed unlikely to add to Treasury purchases, slow pace of existing program: WSJ
- Trichet: High level of uncertainty remains; prudent on economic outlook
- US import prices rise 1.3% in May, down 17.6% y/y
- BOE’s Dale: Inflation targeting should be “enhanced”
- German tax revenue falls 7.1% y/y in May
- Pimco’s El-Erian: Fed won’t hike this year; dollar to fall in coming years, Fed to keeping buying bonds.
- Ahmadinejad and challenger Mousavi both claim victory in Iranian presidential election
- 10 year notes end lower in yield at 3.79%; Oil closes at $72.30
- S&P 500 closes flat
Another very choppy day within the familiar 1.3950/1.4150 (give or take 25 pips) range with the bottom of that range probed today before a rebound above the 1.4000 handle. EUR/USD fell to 1.3937 in early New York trade as the reflation trade suffered a set back. Oil fell below $71 intraday and and equities slumped early but both recouped sizable chunks of their losses to close only modestly lower on the day.
EUR/US found demand from an Asian central bank and from a powerful NY investment bank at the 1.3940 level and the IB bought the pair up above 1.4000 before the rally stalled at 1.4040. US rela money accounts were sellers in the afternoon into strength for a second day running today. US and German names were buyers just below 1.4000 in thin afternoon markets.
USD/JPY closed near its highs following on the heels of Japanese finance minister Yosano’s comments on his unshakable faith in US Treasuries and the week Japanese GDP report last night. It ended around 98.35.
Cable jumped strongly late in London. News that only half the Barclays/Blackrock $13.5 bln deal for BGI will be in cash helped knocked the pound down to 1.6332 early on. It rallied above 1.6522 at midday and New York but ended softer at 1.6430 as EUR/GBP recovered from a tumble below 0.85. It slipped to 0.8482 on the London close but closed in New York at 0.8520.
