- US GDP unrevised at 2.8% in Q1; PCE dips to 1.4%
- Weekly jobless claims rise 15,000 to 424,000
- KC Fed manufacturing index slides to -2 in May from 17 in April
- ECB’s Noyer: Duration of Greek IMF loan could be extended
- Eurogroup’s Juncker: IMF may not release next tranche of Greek rescue loan; EU governments cannot make up the difference
- US 10-year note falls t0 306% on weak data, fear of super-easy Fed policy being extended; 10-yr bund falls below 3% yield on safe-haven flows
- S&P 500 rises 0.4% to 1326
- oil falls $1.01 to 100.30; gold down $5 to $1520
EUR/USD was on the rise after very weak US GDP and jobless claims data renewed fears that the Fed may have to keep the printing presses working for months to come until the Eurogroup’s Juncker took to the mike. He opined that the IMF may withhold payment on the next tranche of its bailout loan and he said Europe would not make up the difference. EUR/USD fell from the 1.4200 area as low as 1.4068 before pulling out of its dive. Sliding US yields during the afternoon undermined the dollar late in the day, but it remains a tight race between the dollar and euro for “worst in show”. EUR/USD offers are seen toward 81.45/50 now; small stops lie above.
USD/JPY was crunched along the way as risk aversion jumped on the Greek fears combined with the sharp decline in US yields. We fell from around 81.70 to 81.15 as massive stops were triggered below 81.60 with more below 81.30. Offers are seen on rebounds now toward the 81.50/60 area.
EUR/CHF fell to 1.2205 as the Swiss safe-haven dominated morning trade. We close at 1.2235.
AUD and Kiwi were in demand on reported Chinese demand for commodities currency.
GBP held up very well today as MPC member Tucker raised inflation concerns and hinted he could be persuaded to back a hike before long.