- ECB staff cut 2013 growth forecast midpoint to -0.5% from -0.3%
- Draghi says growth view unchanged, will gradually pick up in H2
- Draghi prevailing consensus was to leave rates unchanged
- US Jan trade deficit 44.4B vs 42.6B exp
- Canada trade deficit 0.24B vs 0.6B exp
- Initial jobless claims 340K vs 355K exp
- US consumer credit $16.2B vs $14.7B exp
- Canada Jan building permits +1.7% vs +5.3% exp
- S&P 500 up 0.2% to 1545
- USDJPY hits fresh cycle high
- EUR leads, JPY lags
The headlines on Draghi don`t capture the essence of his speech. The market came into the press conference wondering if the ECB could cut next month but left with the distinct impression that Draghi & Co aren`t overly worried about growth. It was one of those press conferences where you had to be listening — he was upbeat on Italian politics, upbeat on an H2 recovery, upbeat on LTRO repayment and didn`t put any emphasis on the likelihood of a rate cut.
As a result, the euro jumped from 1.3000 to 1.3060 in a quick thrust followed by a second move to 1.3116. Late in the day, the euro ticked a few pips higher but there was no follow through. Last at 1.3104.
USDJPY broke the 2010 highs and traded above 95.00 for the first time since mid-2009. After tripping some stops up to 95.09 a round of profit taking sent it back to 94.85.
Cable shot 90 pips higher to 1.5070 after the BOE decision not to move on rates but it declined steadily in US trading, last at 1.5013.
The commodity currencies were choppy but generally stronger. AUDUSD last at 1.0269 after touching 1.0290.
