those hoping for a bounce after the heavy falls seen on Tuesday and Wednesday were disappointed as US stocks continued to remain under pressure. The USD enjoyed its safe haven status and gained across the board with the notable exception of the Japanese Yen. U.S. 10 Year Treasury Yields continued to fall overnight and this is directly correlated to the USD/JPY major. Looking ahead, UoM Consumer Sentiment forecast at 83 vs. 82.6 previously.
The Euro (EUR) could not reclaim the 1.2800 handle and traders sold down to 1.2700 support in the U.S. session. So far on Friday we are getting a nice bounce but without positive Greece and Spanish news we are unlikely to get far. The ECB met overnight and kept rates at 1.0% and remained downbeat on the outlook with downgrades to the 2013 Growth forecasts. The Sterling (GBP) struggled in the risk off environment falling below 1.5950 in the European session before returning to the 1.6000 level by the end of the U.S. session. The BoE met and held rates at 0.5% and kept their asset purchase program at 375bn as widely forecast. Looking ahead, German October CPI forecast at 0% m/m. Also UK September Trade Balance forecast at -8.9bn vs. -9.84bn previously.
The Japanese Yen (JPY) was the main currency in play overnight with USD/JPY leading the other Yen crosses lower. As mentioned above U.S. Bond Yields are dropping after Obama won his second term of President as he will likely pick a head for the U.S. Federal Reserve with a loose monetary bias similar to Bernanke. Australian Dollar (AUD) was strong after Employment change in October beat expectations at +20k vs. +15k forecast. AUD/USD broke above 1.0400 and hit stops flying to 1.0445 before easing back in the U.S. session. Update China October CPI at 1.7% vs. 1.9% previously.
Oil & Gold (XAU) Gold is doing well post Obama and closed at $1730 well positioned to resume its uptrend. OIL/USD dipped briefly below $85 before being bought back aggressively and we are attempting to rally off the level here in Asian trade Friday.
Pairs to watch
