- ADP employment report shows private payrolls up 216,000 in February, slightly firmer than expected
- Non-farm productivity revised up to 0.9% from 0.7% in Q4; unit labor costs jump 2.8%
- SNB board members cleared of any wrongdoing in FX trades
- Bloomberg: PSI participation up to 58%
- WSJ: Fed considering sterilized bond buying
- Spanish budget minister: Regions, towns owe EUR 35 bln (roughly 8% of GDP)
- Germanys Schaeuble: It was wrong to let Greece into the euro; Greece still uncompetitive after wage cuts; discussed Greece leaving euro with Greek FinMin; optimistic Greek bond swap will succeed
- US consumer credit rises $17.8 bln
- RNBZ holds rates steady at 2.5%
- S&P 500 rises 0.7&, US 10-yr yields rise 2.5 bp to 1.974%
- WTI rises $1.50 to $106.20; gold rises $11 to $1686
EUR/USD fell just below 1.3100 at its worst during the US morning before rebounding sharply to 1.3164 on dual headlines from either side of the Atlantic. Word that 58% percent of bondholders (according to Bloomberg) had signed on to the debt swap was greeted positively by the euro. So was news that the Fed may borrow a page from the ECB and buy bonds while at the same time draining the liquidity created by the purchases via sterilization (withdrawing the liquidity via reverse repos).
Despite the QE-like news and the Greek hopes, EUR/USD slammed into a brick wall at 1.3164, a pretty pathetic showing, in my view. Stops are gathering in the 1.3170/75 area now, traders report.
USD/JPY rose back above the 81.00 level, supported, some say, by the potential Fed move, as rates on the short-end of the curve would be less distorted under the Fed’s contemplated program than by the current Operation Twist in which the Fed sells short-dated debt while buying long-dated debt…
