- Yesterday’s leak was correct with China’s latest CPI coming in at 4.6%
- 2010 official GDP +10.3%
- Q4 GDP rose more than expected at +9.8%, maintaining inflationary concerns
- Producer prices rose 5.9% YoY, consumer prices +4.6% YoY
- Reuters Tankan shows Japanese corporate sentiment improving
- Brazil raises rates by 50bps to 11.25%
- NZ CPI +2.3% QoQ, as expected
- Spain to ramp up bail out of banks- WSJ
- Regional stockmarkets fall by just over 1% on average
- Gold steady at $1368/oz
A pretty quiet session all up with the USD regaining a little ground as pairs like cable and AUD/USD retraced off significantly overbought levels.
EUR/USD closed in NY at 1.3465 and has been reasonably quiet in a 50 pip range as traders resign themselves to the fact that some extended range trading might be on the cards. The offers above 1.3500 proved more than capable of soaking up the big stop-loss buy orders and Sovereign names are waiting on the bid in the low 1.33’s; a perfect recipe for range trading some would say. The WSJ article on Spain’s efforts to assuage investors has had no impact. Ranges: EUR/USD 1.3428/76, EUR/CHF 1.2851/82
Cable has been heavy for most of the session with GBP/JPY selling and EUR/GBP buying again to the fore. There were no major developments, so this is regarded as normal market adjustments. Ranges: Cable 1.5922/99, EUR/GBP .8414/44
AUD had expected to be quite volatile given the raft of data coming out of China but with most indicators coming in on expectation, the volatility has stayed away. Range: AUD/USD .9942/1.0008
USD/JPY has returned to it’s usual 25 pip range in Asia. Kampo bids below 82.00 are dissuading the bears but rallies have been shallow as cross-selling continues. Ranges: 81.99/82.24