- FOMC: Fed prepared to ease “before long”
- ECB’s Weber: End bond buying now; discusses exit in depth
- ECB’s Trichet: Non-standard policy through year-end, then “we’ll see”
- Fed’s Hoenig: Hike rates to 1%, no QE
- Canadian budget shows deficits for next 5 years
- S&P 500 closes 0.4% higher at 1170
- US 2 year note yield trades to record 0.33% low intraday, closes at 0.37%; 10-year note up 3 bp to close at 2.42%
EUR/USD fell to 1.3797 in early US trade as traders continued to take profits on EUR longs for a second day. A weak opening on Wall Street helped fuel the early weakness. Asian buying of EUR/USD from the 1.3810 area along with heavy sales of USD/CHF (CHF was in major demand today, apparently versus GBP) helped spark a recovery in EUR/USD which soon triggered stops above the 1.3850 level.
1.3880/90 slowed the rebound for a time but the market soon jumped to 1.3935 in the wake of the minutes of the September FOMC meeting which confirmed the market’s expectation that the Fed will announce fresh bond buying at the November 3 meeting.We consolidated above 1.39 for the balance of the US afternoon.
GBP/USD traded with a weak tone throughout the US session. The pound was sold heavily on the crosses and was unable to rally along with EUR/USD. We dipped back as low as 1.5760 in US afternoon trade. Asian bids are eyed at 1.5750, traders report. We close at 1.5800.
USD/JPY consolidated recent losses between 81.66 and 82.00 during the US session. No sign of the BOJ today despite the buck trading just 2 yen above all-time lows.
USD/CHF and EUR/CHF were heavily sold today with US investment houses and a UK clearing bank both seen selling large amounts. Some suspect a one-off M&A-type flow may be at play.
AUD/USD outperformed all day today, shrugging off the early bout of USD strength to trade 0.9800/0.9875 in New York trade. We close at 0.9862.