- Fed’s Bullard: Fed should retain flexibility to respond to any weakening in economy by extending beyond March authority to buy mbs, agency bonds
- Shanghai share index ends up 0.9%, 3 1/2 month closing high
- French Nov manufacturing PMI 54.2 from 55.6 in Oct, 2-month low, below median forecast 56.0. Services 60.4 from 57.7 in Oct, 37 month high, higher than median forecast of 57.8
- German Nov manufacturing PMI 52.0 from 51.0 in Oct, slightly better than median forecast of 51.6. Services 51.5 from 50.7 in Oct, slightly better than median forecast of 51.2
- Euro zone Nov manufacturing PMI 51.0 from 50.7 in Oct, slightly below median forecast of 51.2 Services 53.2 from 52.6 in Oct, slightly better than median forecast of 52.9. Composite 53.7 from 53.0 in Oct, slightly better than median forecast of 53.4
- ECB’s Ordonez: Unclear if world economy can withstand withdrawal of extraordinary measures
- IMF’s Strauss Kahn: Sustainable recovery depends on policymakers taking right steps in coming months. Global economy in holding pattern; getting better but still vulnerable. Banking systems “remain undercapitalized.”
Risk appetite in ok shape at the start of the week. European stocks up, FTSE and DAX both around +1.6%. Oil up close to a buck. Gold meanwhile continues its sojourn to ever-higher levels, posting yet another record today. Against this backdrop USD and JPY weaker. The USD has also been undermined by comments from Fed’s Bullard (see above)
EUR/USD started around 1.4925 and basically went straight up. Apart from the aforementioned, the EUR/USD pairing also garnered support from decent European PMI data (see above). The rally eventually stalled at well-touted sell orders, including sovereign interest, said to lie at 1.4990 up through 1.5010. We’re presently back at 1.4975.
Cable also moved higher out of the gate, moving quickly from 1.6530 to test well-touted sell orders up at 1.6590/00. There ensued a bit of a battle with cable suffering a brief sell-off but the dip soon elicited renewed buying enthusiasm.
Stops were triggered on move through 1.6610 and we’ve been as high as 1.6629 so far. Talk now of stops on move through 1.6630 ahead of more sell orders up around 1.6650.
USD/JPY sits at 88.85, effectively where it started. Sidelined once again.
With risk sentiment in good order, AUD/USD has seen a nice advance, presently up at .9240 from early .9185. A French name was seen as a strong buyer on the way up.