Successful bond auctions in Spain and France have kept the markets buoyant with Asian equities rallying, though this may be just be markets playing catch up with their American counterparts after yesterday's rally . European stocks are mixed while the major currencies appear to be consolidating. This is not surprising as we approach some important US data both this afternoon and tomorrow.
European bonds are up for the day with French 10-year bonds the best performers following decent bond auctions in both Spain and France. The move to increase USD liquidity has carried over into today but market players may be overlooking European data that was released this morning. Euro zone final manufacturing PMI was in-line with market expectations at 46.4 but is down for the sixth straight month and well below the 50 boom/bust level. Traders will now turn their attention to US data releases with the ISM survey today and the jobs report tomorrow.
The EUR/USD is within yesterday's wide range but a move above yesterday's high and the pair could test the 1.3610 resistance from the November 18th high. Support is found back at 1.3410 from this morning's low.
The kiwi is looking stretched after rallying 5.5% from last week's lows against the USD. The NZD/USD has found resistance at its 55-day moving average at 0.7820. A break here could propel the pair to the 0.8020 from the trend line off of the August and October highs. Support comes in at yesterday's low of 0.7575 and the November low of 0.7400.
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