SubscribeFX MARKETS QUIET AHEAD OF THE CHRISTMAS
The dollar was stronger against most of the G10 on light trading volume, which is typical prior to a major holiday. The EurUsd rose 30pips to the mid 1.39 level, while the UsdJpy picked up 10pips to the low 90 price area. The GbpUsd dropped 95pips to low range of 1.48, probably due in part mostly to heightened volatility. Bond yields gave up little ground in terms of prices, as treasury yields remain extremely tight. Eurobond yields dropped across the board, with the French and German 10yr down 7bps. Equity markets closed lower in the US, with the Dow down 59pts and the SPX off 16pts. Commodities displayed a decent amount of price activity, with oil back below $40bbl to $39bbl and gold up higher at $846oz.
There was no data out of the Eurozone or UK, the Belgian govt. announced their resignation on the back of the failed Fortis rescue plan. This news did very little to move the Euro, ECB President Trichet is scheduled to speak tomorrow. Traders will be watching UK GDP, which is expected to come in negative on a quarterly basis. A negative GDP figure will support additional easing by the BoE in Q1 2009, much of which is priced into the market.
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