- Bank of Portugal cuts growth outlook
- Case Shiller home price index down 3.1% y/y
- S&P cuts sovereign ratings of Portugal and Greece ; Yields reach record highs for each
- US consumer confidence tumbles to 63.4 in March from 72.0 in Feb
- BOE’s Weale: Policy should be tightened; VAT hike adds 1.0-1.25% to CPI
- SNB’s Jordan: Strong franc limits growth, inflation; rates need to rise over medium-term
- ECB’s Mersch: Persistently low rates can lead to asset bubbles
- ECB’s Stark: Rates must be normalized step by step.
- S&P 500 rises 0.7% to 1319
- US 10-year note rises 5 bp to 3.49%
- Oil reverses losses, ends up $0.80 at 104.80
USD/JPY was the start of the day, rising through solid selling interest stretched from 82.00 through 82.50 and ending the session on its highs. The JPY was sold against just about everything today on the assumption that the BOJ will stay very easy for a very long time while the ECB has shifted in tightening mode and the Fed may not be too many months behind. Buying was strong in AUD, GBP, CAD against the JPY as well. EUR/JPY closes above 116.00 for the first time since May of 2010. It reached 116.35 on momentum-fund buying late in the day.
EUR/USD closes at its highs fro the US session about 1.4105, dragged up on EUR/JPY demand. The market shrugged off downgrades of Greece and Portugal today. 1.4047 was the low, prior to the downgrade, when we bottom at 1.4955. Solid selling was seen toward 1.4150 during London hours with China among the sellers.
Cable rallied late in the day with most of the buying coming versus the JPY. We end at 1.6005. 1.5943 was the intraday low.
AUD/USD was boosted by real money buying late in the London session and was further underpinned by AUD/JPY buying later in the afternoon. We bounced from 1.0205 early in the day and gather steam to the topside as stocks and commodities rallied. Risk appetites appeared to be in full flower in afternoon trade. We end at session highs of 1.0295.