- ECB receives capital boost of EUR 5 bln; increased volatility, larger financial system
- US weekly jobless claims at 420,000, as expected
- US current account deficit rises to $127.2 bln in Q3 from $123.2 in Q2
- US housing starts rise 3.9% in Nov from -11.1 in Oct
- Philly Fed survey rises to 24.3 in December from 22.5 in November; much stronger
- Geithner: TARP losses may amount to less than 1% of GDP
- Moody’s puts Greece on review for potential downgrade
- IMF board approves Irish loan package
- EU draft: EFSF will be adequately funded ; will do whatever is necessary to ensure the stability of the euro zone as a whole
- Wide-ranging Strauss-Kahn interview with Reuters
- US 10-year note closes at 3.43% yield after retest of 3.56% trend yield fails to break
European sovereign debt concerns and US bond yields remain the main topics of discussion among market players. Both helped send EUR/USD to its lowest levels since first thing Monday morning in Asia, making a low of 1.3181.
Fear of getting caught short near a key area of support along with a sharp pullback in US bond yields help send EUR/USD back up in its range, but only as far as the low 1.3240s.
The key signal to cover was the bear’s inability to push EUR/USD much lower from the 1.3220 level on news of Moody’s putting Greece on review.
USD/JPY ran up to 84.45 on the firm bond yields (with a big US primary dealer leading the buying for a second day running) but fell all the way back to 83.99 as the yield gains were reversed.
Cable bucked the stronger dollar trend during US hours, rising as EUR/GBP fell on European fears. It ends near its highs for the day at 1.5630 and still very much trapped in a wide 1.55-1.60 range.
USD/CHF saw strong spec selling on rallies again today, a sign that Europe remains very much at the forefront on investors minds even in the run-up to today’s EU summit.