Investors continued to pile on risk in the London session as the hangover from the massive rally in US stocks yesterday continues to permeate the marketplace. European bourses have added about +1.3% thus far while US equity futures are pointing to more than +1.0% open. US Treasuries are not confirming this and are actually a touch higher on the day. Gold is also up a modest $3 to 902/901 after continuously finding good support at the daily trendline near the 890 level. Ostensibly there is good buying interest down there.
Eurozone data worsened as German factory orders slipped a sharp -8.0% in January on the back of a -7.6% decline the prior month. This took the annual rate to an absolutely dreadful -37.9% and the worst since records began in 1992. EUR shrugged this off as the correlation of higher stocks higher EUR looks to be back in play at least for now. The pair jumped more than 90 pips in the session and was sitting near 1.2750/60 ahead of the NY open. Look for a potential reversal in risk trades to elicit some weakness here. The yen crosses were also indicative of EUR strength. EUR/JPY jumped more than 70 points towards 125.30/40 and this left USD/JPY about -20 pips lower near the 98.30/40 area.
The NY session is once again light on the economic data front. Noteworthy will be Canada home prices and weekly oil inventory data. The market expects home prices to dip a modest -0.2% in January from -0.1% and for oil inventories to show a modest +250K build. Both of these releases should elicit some good price action in USD/CAD on the follow. The pair remains under pressure while below 1.2800 and we would look for very good support on a try down to the 1.2710/00 area. Stay tuned!
Upcoming Economic Data Releases (NY Session) prev est
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3/11/2009 12:30 GMT CA New Housing Price Index MoM JAN -0.10% -0.20%
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3/11/2009 18:00 GMT US Monthly Budget Statement FEB -$175.6B -$205.0B
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3/11/2009 20:00 GMT NZ RBNZ Official Cash Rate 12-Mar 3.50% 3.00%
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3/11/2009 21:30 GMT NZ Business NZ PMI FEB 42 - -
