Forex headlines for Sept 11, 2013:
- ECB’s Hansson: We have discussed another LTRO
- US wholesale sales +0.1% vs +0.5% exp
- BOE’s Miles says “bizarre” to say forward guidance has failed
- Verizon raises $49 billion in largest-ever bond deal
- Unexpectedly strong demand at US 10-year bond sale
- ECB’s Asmussen: Expect good economic developments in Autumn 2013
- Schaeuble says Germany has been right in rejecting Eurobonds
- S&P up for seventh day, gains 0.3% to 1689
- GBP leads, USD lags
The market went haywire between the US stock market open and the options cut. USD/JPY and EUR/USD led the way as the buck took a beating. There was chatter about large 100.00 and 1.33 expiries but we couldn’t find the evidence. As the day grew longer, the questions remained unanswered.
We think the Verizon-Vodafone deal has pushed cable beyond reasonable expectations and might help explain the USD rout but the bigger parts of the moves were in other currencies and the timing points more towards options. I think this one will remain a mystery.
The final leg of US dollar weakness came after the 10-year note sale. The yield was about 3 basis points less than the market expected. Lower yields make the US dollar less attractive to foreign money and that pushed the dollar 20 pips lower on most crosses.
The commodity bloc was bubbly once again with AUD/USD hitting 0.9338, just shy of the late June high of 0.9345. That level will probably cap the market for the next few hours with Aussie employment on the docket.
