- US January CPI rise 0.4%; core up 0.2%
- US weekly jobless claims rise 25,000 to 410,000; 4-wk average 418,000
- Iran still seen moving ships through Suez Canal; Egypt says no license given
- Philly Fed soars to 35.9 in Feb from 19.3 in Jan
- Portugal to need bailout by April: Reuters
- Fed’s Hoenig: Inflation rising slowly, modestly
- Fed’s Fisher: Opposed to further accommodation
- Fed’s Evans: Unemployment too high, inflation too low; stimulus needed
- Ex-Buba Welteke: Weidmann inexperienced
- Moody’s downgrades the subordinated debt of German banks
- US 10-year note falls 5 bp to 3.575%
- S&P 500 rises 0.3%, fresh post-Lehman high of 1340
- Oil rises $1.50 to 86.50; CRB up 0.9%, gold rises to $1383.50
EUR/USD was bought on every dip today, now matter how shallow. Didn’t matter what the news was, there was a buyer. The presumption is that central banks are the buyers though the last confirmed central bank buying we heard was prior to the US open.
We rallied to test trendline resistance at the 1.3617 level (overshooting by a few pips, before spending the afternoon in a consolidation. Eye-popping Philly Fed data; news that Iran is still seeking to transit war ships through the Suez canal, a story late in the day that German subordinated bank debt had been downgraded…none of it could knock EUR/USD off its perch. Buyers are seen now in the 1.3575/85 region with sellers toward 1.3615/20.
USD/JPY was sent lower by the slump in US yields. It broke support at 83.40, falling back to 83.15 before rebounding to close at 83.32. 83.10 and 82.80 are support with resistance now at 84.40/50.
AUD/USD experienced another drive-buy (pun fully intended). We broke out of dull 1.0025/1.005 range with a rally to 1.0125 in no time flat on another very sloppy execution of large order. Rumors continue to swirl that the buying is linked to insurance payments tied to the string of natural disasters down under in recent months. Trendline resistance at 1.0180 is eyed if 1.0150 resistance is overcome.
Cable completed its round trip from 1.6185 to 1.5990, after King yesterday, and back.
The clearest sign of how disjointed the market has become was the continued demand for CHF and oil and bonds while at the same time US stocks are at their highest since summer 2008 and and the dollar remains week. EUR/CHF fell to 1.2900 from above 1.3000 earlier in the day.