- ECB, Bank of England leave rates unchanged at monthly meetings
- Senior German MP: Not sure Greece can be saved
- US retail sales rise 0.1% in December; ex-autos fall 0.2%; much weaker than expected
- US weekly jobless gains jump 24,000 to 399,000
- ECB’s Draghi: Tentative signs of stabilization in euro zone; LTRO is supporting banks, allowing them to refinance expiring bonds; interbank lending thawing; ECB expanding collateral further for next 3-year LTRO
- US business inventories rise 0.3%; sales rise 0.3% in November
- IIF: Time running short on Greek debt restructuring talks
- IMF mission to Greece to start next Tuesday
- Handlesblatt: Germany to lower GDP outlook to 0.75% from 1% for 2012
- UK Chancellor Osborne says euro will survive the crisis
- US budget deficit rises to $86.0 bln in December from $78.1 bln in December 2010
- Bloomberg: EU oil embargo against Iran may be delayed for six months
- US President Obama asks Congress to raise debt ceiling $1.2 trln
- S&P 500 rise 0.25% to 1296; Milan rises 2%
- US 10-year note rises 2 bp to 1.925%; Italy tumbles 37 bp to 6.66%
- WTI falls $1.80 to $99.07; gold rises $8 to $1650
The long-feared euro short-squeeze finally unfolded today as sovereign debt markets breathed a big sigh of relief after successful auctions in Spain and Italy. An even-temper Draghi helped bolster confidence as well as he highlighted the positive impacts from the 3-yr LTRO in late December and the prospects for a second next month.
EUR/USD tripped stops above 1.2780 and above 1.2820/25, reaching 1.2846 before stalling ahead of the 10-day moving average at 1.28475. Offers are seen heavy between 1.2850 and 1.2860; stops are seen clustered in the 1.2865/70 area. Dips were quite shallow in afternoon trading.
Traders noted heavy covering of EUR/AUD shorts and EUR/CAD shorts during the US morning with those flows helping undermine the commodity currencies intraday before a recovery in afternoon trade. AUD at the upper end of a narrow range, at 1.0340. 1.0290/1.0350 was the NY range.
EUR/CHF slipped through stops below 1.2100 today with apparently now sign of the SNB. We dipped to 1.2085 before closing at 1.2102.