New York Session – January 17, 2012 4:13 PM

The buck was weaker against all of its major counterparts except the Japanese yen and risk sentiment was higher after better than expected economic reports and as Greece nears a deal with its private sector creditors. Chinese GDP dropped by less than anticipated supporting the view of a soft landing. The figures showed that China’s economic growth slowed to 8.9% in Q4 from the prior 9.1% (cons. 8.7%) alleviating concerns of a sharp decline in global demand. In Europe, the German ZEW survey beat forecasts climbing to -21.6 from the prior -53.8 (cons. -49.4). U.S. Empire manufacturing also surprised to the upside with a print of 13.48 in January from the prior 8.19 (cons. 11.00). The better data around the globe spurred risk appetite as European and U.S. equity markets closed to the upside.  U.S. stock markets rallied on the first day of trading after a long holiday weekend with the Dow Jones Industrial Average rising by about +0.48% while the S&P 500 advanced around +0.36%. U.S. Treasury yields declined – 10-year yields shed about 1.4 bps to 1.85% and the dollar traded softer on the back of today’s risk taking. The Dollar Index fell to test the daily Tenkan line just below the 81 figure. Full text »

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