- US weekly jobless claims fall 17,000 to 421,000
- German economy minister sees GDP growing at least 3.4% in 2010.
- ESM could hit European sovereign debt ratings: Fitch
- US wholesale inventories rise 1.9% in October; larger than expected
- Irish Labor party says will vote against IMF/EU bailout
- EU’s Rehn: Greek statistics now reliable; no new loan needed
- Bank of Canada: Financial stability risks rising; sovereign debt biggest risk
- ECB: Sovereign debt biggest risk to financial stability; some banks too dependent on ECB for liquidity
- EU’s Van Rompuy: Stability mechanism will require Treaty change
- Bank of Italy’s Draghi: Risks to ECB bond buying: FT
- Moody’s puts Portuguese banks on review for possible downgrade
- US 30-year bond auction well-received; yields slip. 10s close at 3.22%
- S&P 500 closes at 2-year high of 1233, up 0.4%
EUR/USD managed to slide through the solid area of support between 1.3200 and 1.3180 in late European trade, fueled by news that one of the Irish opposition parties will vote against the EU bailout. Also prompting sales was a report from Fitch Ratings that the new European Financial Stability mechanism may trump sovereign debt of EU nations.
We fell as low as 1.3164 before staging a rebound into the European close. The rebound accelerated, taking EUR/USD toward 1.3250 after a successful US 30-year bond auction soothed jitters that a further rout in the US bond market lay ahead. Yields stopped rising and dipped a bit after the auction which prompted the dollar to ease a bit across the board.
EUR/USD resistance lies in the 1.3250/60 area on rebounds near-term.
USD/JPY moved in a tightly correlated dance with US bond yileds today. As yields slipped in the afternoon, USD/JPY pulled back from 84.05/10 area. We end the day at 83.60. 83.50 was the afternoon low.
Cable was hard hit late in the London session as riots broke out ahead of a UK parliamentary vote on tuition hikes. We slipped to 1.5712 before rebounding later in the day as US yields slipped. We end at 1.5770.
Commodity currencies were largely sidelined in the US. AUD traded in whippy fashion between 0.9810 and 0.9850. USD/CAD was steady either side of 1.01.