Email| 10-Year: +03/32....%.... GNMAs: .... USD/JPY: 81.36.... EUR/USD: 1.3083 |
 |
MBA Mortgage Index: Actual 6.9%, prior -2.4% |
Strong Pound: The dollar index trades near session highs at 79.80 as it looks to regain the 80.00 level. EURUSD is -50 pips at 1.3075 as Spanish worries continue to mount. The latest worries stem from Spanish figures which show non-performing loans as a proportion of total lending increased to 8.16% in February from 7.91% in January. Traders will remain on the lookout as critical support in the 1.3000/1.3050 area is currently being tested. Eurozone data was limited to the current account balance which posted an unexpected deficit of EUR1.3 bln (EUR1.4 bln expected). GBPUSD is +45 pips at 1.5970 after the latest Bank of England minutes showed noted dove Adam Posen has backed down from his calls for more Gilt purchases as inflation has risen faster than he anticipated. The move comes at a precarious time for the Central Bank as the nation will slip into recession with another negative GDP print. Action continues to hug the pair’s 200-day week moving average with a breakout likely sending shorts running for the exits. Data out in Britain showed the claimant count change (3.6K actual v. 6.6K expected) top expectations while dropping the unemployment rate to 8.3% (8.4% expected). USDCHF is +45 pips at .9195 and trades at its best levels of the session. The weaker franc comes on the heels of the Swiss ZEW Economic Expectations inching up to 2.1 (0.0 previous). Meanwhile, EURCHF is +10 pips at 1.2025.
USDJPY is +50 pips at 81.40 after breaking through 81.00 resistance. Trade continues to hug the pair’s 50-day moving average with overhead resistance coming into play near 82.00. AUDUSD is -35 pips at 1.0360 and is back below its 200-day moving average. The softer Aussie dollar comes after the MI Leading Index rose 0.2% MoM and as traders trim riskier assets. USDCNY strengthened to 6.2999.
USDCAD is flat at .9905 as trade holds near the lower end of its range. The pair dropped close to 100 pips during yesterday’s session after the Bank of Canada held its benchmark interest rate steady at 1.00% and noted “reduced slack in the economy.” The Bank of Canada Monetary Policy Report and the Bank of Canada press conference will take place later this morning.
