- Trichet at BIS meeting: Global economy near inflection point
- OECD: UK economy may have hit bottom
- Canadian new house price index falls 0.5% in April, 2.4% y/y
- Conference Board’s Employment Trends Index falls at slowest rate in months, 89.5 in April from 90.1 in March
- Brazil’s central bank buys dollars Friday and today: first buys in eight months
- US budget deficit forecasts grow; now $1.84 trln in 2009
- Bank analyst Whitney sees further slide in bank stocks
- US bond yields tumble on soft stocks, short-covering; 10 year at 3.17 versus 3.38 on Friday
- S&P 500 closes 2.1%
EUR/USD found buying on dips in early US trade buy central banks helping the pair hold above the 1.3550 level despite a bout of profit-taking in the reflation trade. An upward revision in US budget deficits along with heavy selling interest in USD/CHF helped spur a short-covering rally in EUR/USD late in European trade. EUR/USD squeezed up to 1.3640 before easing below 1.3600 again for the balance of the afternoon.
USD/JPYand EUR/JPY both fell back today. The cross slipped to retest the 200-day moving average at 132.27 late in the session. The average was decisevely broken in Friday’s risk rally but an outside day key reversal has technicians concerned we may have topped. USD/JPY support lies at 97.15 and and 96.27 (trendline from 93.55).
USD/CAD saw a sharp short-covering rally in North American trade from oversold levels; AUD/USD was a similar story. With the boat heavily loaded up, it was about to begin listing to port at the first sign of a storm, and list it did, falling to 0.7580 intraday from 0.7713 trend highs. It ends near 0.7600.
