The USD continued to be the currency of choice as risk aversion remained prevalent in the NY session. Stocks failed to eke out any significant rally despite more details on the Obama housing bailout. The S&P shed a modest -0.1% and was sitting at a lowly 788 at the close – less than 50 points shy from the 741 November low.

US Treasuries were lower with the 10-year yield up a little more than 10bps to 2.75% as the FOMC meeting minutes suggest the Fed will wait to see the results of the current liquidity programs before embarking on any Treasury security purchases. Gold soared another $15 on the day and closed near 985 after finding a good barrier at the 988 July highs. Above there should open up potential to 1000 initially.

Poor US economic data only added to the appetite for safe haven assets. Housing starts plunged to 466K in January from 560K the prior month and are now at the lowest level since records began in the late 1950s. Meanwhile, industrial production fell a steeper than anticipated -1.8% last month on the heels of a-2.4% drop in December. This spells more weakness in the US economy and moribund global growth.

EUR/USD shed about -60 pips in NY trading and was sitting near 1.2530/40 by the close. The 1.25 mark now looks like the next crucial base here and we would look for weakness to accelerate sharply on a good break through there. USD/JPY rallied a hard 100 pips into 93.70/80 in another sign that the buck was king today. The 100 day SMA and hourly trendline resistance lurk at 94 now and we would look for a break above there to see gains extend towards the 94.65 highs back in early January.

Upcoming Economic Data Releases (Asia Session)  prev  est

  • 2/19 0:30 GMT AU  New Motor Vehicle Sales MoM  JAN  1.80%  - -
  • 2/19 0:30 GMT AU  New Motor Vehicle Sales YoY  JAN  -15.70%  - -
  • 2/19  JN  BOJ Target Rate  19-Feb  0.10%  0.10%
  • 2/19 5:30 GMT JN  Tokyo Dept. Store Sales (YoY)  JAN  -10.40%  - -
  • 2/19 5:30 GMT JN  Nationwide Dept. Sales (YoY)  JAN  -9.40%  - -