- Canadian building permits dip on Toronto strike
- German finance minister Steinbrueck expects German GDP to fall 5-6% this year
- NIESR: UK recession ended in May, economy grew 0.2% in three months to August; stagnation ahead
- ECB’s Weber: Inflation fears unfounded on ECB actions; will not change inflation target
- ECB’s Nowotny: Euro not likely to eclipse dollar; multi-polar currency world seen; Unemployment seen reaching 12% by 2011
- OPEC President: No output cut
- US sells $38 bln 3-year notes at 1.487% yield; $20.5 bln indirect. Bid-to-cover 3 times oversubscribed
- US consumer credit falls record $21.6 bln in July
- S&P 500 rises 0.9% to 1025. 10-year notes up 2 bp from Friday but up 17 bp at 4.47% from last week’s trend lows.
EUR/US built on the momentum begun overnight and managed to overcome barrier options at 1.4500 in early trade. Prices reached 1.4535 before stalling. Dips were limited to 1.4460 during the morning amid rumors that the SNB had a bid at 1.0445 in USD/CHF. Afternoon dips were limited to the mid-1.4480s. The close above former resistance at 1.4445 is seen as a very bullish technical factor.Options-related buying of EUR/USD is rumored if 1.4550 is overcome in EUR/USD with many macro players caught short volatility.
USD/JPY held support at 92.00 despite repeated efforts to trigger stops. Stops are seen below 92.00, again below 91.70 and finally below 91.50. Rebounds were limited to 92.30s.
AUD/USD maintained a bid tone through out the session, supported by a 2% rise in the CRB. CAD held up less well, rallying in the morning to 1.0675 but ending the session with the greenback rebound to 1.0785. Political jitters may be causing CAD to under-perform AUD.
Cable could not hold gains and slipped back to close near 1.6500 after failing to overcome range tops around 1.6590 on its first try. A very slow UK recovery was forecast by the NIESR this morning.