- FOMC removes reference to deflation in statement; rates to stay low, no new bond buys announced. Full text here.
- Swiss National Bank intervenes a second time in USD/CHF, EUR/CHF very late in European trade
- ECB’s Bini-Smaghi: Regulators must assure banks lend cash borrowed in refi
- US durable goods orders soar 1.8%; far stronger than expected
- US new home sales fall 0.6%
- BOE’s King,: Economy recovering but not sure how strong; fiscal deficit “truly extraordinary”
- Belarus seeks EU aid
- WTO Lamy; Global trade volumes down 10%
- French budget minister: Can’t inflate our way out of debt; France will miss deficit goal
- US sells $37 bln in 5-year notes at 1.70%; Well received
- Buffett: Not seeing green shoots
- IMF: Australian economic growth has slowed well-below trend; GDP down 0.5% in 2009, +1.5% in 2010; RBA should be cautious in tightening rates; AUD exchange rate broadly in-line with fundamentals; scope for further stimulus if growth weakens.
- US 2- Spain 0 in Confederations Cup soccer
- US 10-year note yields firm after FOMC statement, close at 2.70% from 2.60% before meeting
- S&P 500 rises 0.7%, commodities mixed
The Swiss National Bank set the stage for a sharp USD dollar recovery on Wednesday, intervening in both USD/CHF and EUR/CHF. They came in at midday in Europe and again very late in the European session, driving USD/CHF through 1.10 barriers and EUR/CHF above 1.5300 barriers.
EUR/USD reversed more than 61.8% of the 1.3825/1.4138 rally seen Tuesday and early Wednesday.
The massive ECB refi, cast a pall over the Euro today as did news that Belarus is the latest country from the former Soviet Union to approach the EU with their tin cup out. French budget figures figured into the weakness as well.
The US posted a much better-than-expected durable goods orders report, following on the heels of yesterday’s existing home sales data and the Philly Fed before that. The Fed noted green shoots in its statement but still sees the recovery as muted. Deflation fears have abated enough that they were removed from today’s statement, which suggests quantitative ease measures may be allowed to run their course.
Commodity currencies were underpined early in the session as the reflation trade benefitted from the durable goods data but dollar strength after the SNB and the FOMC ended up pushing AUD down to 0.7960 late. USD/CAD ended at session highs of 1.1560 despite a large M&A deal.