* US Durable Goods rise 4.9% in July, buoyed by a surge in aircraft orders. Ex-transport though the rise was an as expected 0.8%.
* US New Home Sales also beat expectations up 9.6% in July. Supply falls again to 7.5 months.
* Fed’s Lockhart says economy needs low rates for some time.
* French Jobless rises by 10,700 in July
Another interesting session, with cracks appearing in the risk on trade. The data was once again positive, but the markets are getting more and more immune to this as they wonder where the recovery goes from here.
Eur/Usd was under pressure from early on in the European session. A stronger than expected IFO survey saw the pair pop to 1.4350, but it was quickly into reverse as the threat of Chinese selling and the feeling that the risk on trade was growing tired emerged. The pair went to test the usual support at 1.4250 which we’ve tested in the last few sessions, but this time we managed to break through after the market failed to embrace a better than expected Durable goods report. Even the better new home sales report didn’t help the pair as selling pushed the pair to 1.4206. Since then its been a steady grind higher back to the 1.4250 level.
Sterling was once again on the ropes, as Eur/Gbp knocked out barrier options at 0.8800, and Cable was forced lower with the Eur/Usd selling to hit 1.6160. A mini comeback of sorts since then has seen Cable put on a cent to reach 1.6250 aided somewhat by a disappointing Gilt buyback.
