The risk trade continued to dominate and better US economic data provided the catalyst in NY trading. US retail sales was the blockbuster event and the report showed a better than anticipated 2.7% rise in the headline while the ex autos number saw a much more robust than expected 1.1% jump on the month. If that wasn't enough, the NY Empire manufacturing index shot up to 18.9 in September after a 12.1 print the prior month – also much better than forecast.
US equities stalled initially but eventually rallied on the day with the S&P making yet another 2009 high in a 1052.63 close. Treasury yields rose and confirmed the flight to risk, with the 10-year note jumping 4 basis points to 3.45%. Gold was also better bid and sitting up more than $7 on the day near 1007/1008 as we write.
The US dollar was once again, and not surprisingly, the proverbial whipping boy. EUR/USD extended from a NY open near 1.4605 to close around the 1.4660 area. The next big level of resistance is the December 2008 high at 1.4718 here. The pair needs back below 1.4590 to shift the focus decidedly lower in the short-term. Cable recouped some of its overnight losses amidst the USD bashing. The pair recovered from a session low 1.6403 all the way back towards the 1.6490 zone. The better tone to risk also saw the commodity currencies retain a good bid. USD/CAD specifically collapsed from a NY open near 1.0860 to sit by 1.0725 at the close.
Looking ahead to the Asia session, the BoJ policy meeting is on tap. While this tends to be a non-event as the bank has little to do on the rates front, any headlines with regards to JPY intervention should see the yen crosses squeeze sharply higher.
Upcoming Economic Data Releases (Asia Session) prior expected
- 9/16/2009 1:00 GMT AU Westpac Leading Index (MoM) JUL 0.70% - -
- 9/16/2009 4:00 GMT JN BoJ Monetary Policy Meeting 15-Sep
