- Bernanke reconfirmed as Fed Chair; vote 70-30
- Germany and France deny Greek bailout report
- Greek PM no bailout asked for or needed; no talks with China on buying debt
- US durable goods orders rise 0.3%, weaker than expected; Core orders rise 1.3%
- S&P: UK banking system no longer among the most stable and low-risk in the world, expands on December 21 report
- KC Fed manufacturing index rises to 13 in January from 7
- Italy raises 2010 GDP forecast to 1.1% from 0.7%
- S&P 500 falls 1.2% to 1085
- Copper falls 3.75%; Gold tests $1075 support; bounces to $1086; Oil steady at $73.75
- US yields dip from firmer levels early in session. 2-year note 0.87% 0.91%; 10 year notes 3.65% from 3.69%
EUR/USD trades with a heavy tone in the US as Greek fears dominated the morning session. Bond spreads and credit default swaps both gapped higher as investors sought to hedge risk of a Greek default. Investors who bought the Greek 5-year note earlier this week are 85 bp under water. Ouch.
EUR/USD fell as low as 1.3946 in early NewYork trade while rebounds were capped between 1.3980/90 during the afternoon. 1.4028 was the early NY high. Central banks were steady buyers in the 1.3960s area late in London.
Cable was crushed by a report on the UK banking system from S&P. The ratings agency said that the UK banking system is no longer among the most stable and low risk in the world. The high level of indebtedness will weigh on the UK recovery while banks will have difficulty recovering owing to a slow economy. Sounds positively Japanese…
Cable fell as low as 1.6114 from opening levels around 1.6260.
USD/JPY opened on a very firm note but support eroded earlier as the Greek and UK jitters slammed risk appetites. From around 90.30 we slipped as low as 89.65 before steadying. Rebounds stalled below 90.00.
AUD/USD slumped dramatically during US trade as risk aversion and heavy selling of metals undermined AUD. 0.9033 was the early high. We end the session with AUD near its lows, now in the high 0.8930s.
Disclosure: No positions