- SNB holds rates steady, lowers inflation forecast; franc falls
- US weekly jobless claims 450,000, down 3k; prior week little revised
- US PPI rises 0.4%/0.1% core, up 3.1% y/y/1.3% core
- US TIC data; Inflows-less swaps $44.0 bln in July from $23.5 bln in June
- US current account deficit rises to $123.2 bln in Q2 from $109.0 in Q1
- Philly Fed index -0.7 in September, slightly below expectations
- Merkel: Germany will not allow EZ safety net to be extended
- Eurogroup’s Juncker condemns Japanese intervention
- Geithner talks tough on Chinese currency, to address at G20
- BOE’s Posen: Inflation due to a shock less of a concern
- S&P 500 nearly unchanged at 1125; 1129 still key resistance
- US 10-year note climbs 4 bp in yield to 2.76%
EUR/CHF and USD/CHF were the star performers today. Not only did the SNB not hike rates (as giant Swiss bank forecast out of the blue yesterday), it cut its inflation forecast, sending the franc tumbling. Heavy Swiss buying of EUR/CHF raised talk of intervention but the talk died down later in the day. The rally did a great deal of technical damage to EUR/CHF shorts as that chart now shows a resounding bottom. USD/CHF’s rise was slightly less impressive but was impressive in its own right.
EUR/USD was bid-up several times during the US session amid reports of Chinese demand linked to a Spanish auction. We reached 1.3117 briefly but spent most of the day consolidating in the 1.3070/90.
USD/JPY edged higher for much of the US session, quietly absorbing offers along the way. Very late in the day we extended gains as high as 85.94, inching through a trendline drawn off the April highs near 95.
It was a quiet day for commodity currencies in NY with AUD and cad both consolidating recent ranges. 1.0235/1.0290 was the USD/CAD range. AUD went bid late with USD/JPY but closes well below Wednesday’s highs, ending Thursday at 0.9372. Overall, the range was 0.9332/0.9394.