US weekly jobless claims fall to 601,000 , -24,000 US retail sales rise 0.5%, ex-autos rise 0.5%. Gasoline price rise impacts IMF raises 2010 GDP outlook for the US to 2.4% from 1.9% French official: Keeping eye on currency market; volatility hurting economy Volcker: No practical alternative to the dollar as reserve currency; recovery to be sluggish US business inventories fall 1.1% in April US official: Don’t count on US consumer to lead world out of recession WHO raises pandemic threat level to highest level; no prohibition of on movement of people, goods, services Decline in US household net worth slows in first quarter US holds well-received 30-year bond auction Fed’s Lockhart: Dollar’s reserve role will decline very gradually; no near-term challenge to reserve status. Latvian government in “crisis talks” Thursday night- Telegraph Iranian elections: Risk A-jad could be DOA US 10-year note yields brush 4%, close at 3.86% Oil reaches $73.23 intraday, closes at $72.65 S&P slides in final minutes but ekes out new 2009 high close ; up 0.6% on the day but well below 1.4% intraday advance.
Choppy range trade in Europe gave way to a strong intraday trend shortly after the US posted a big drop in jobless claims and improved retail sales data. Good news for the US economy was treated as good news for the reflation trade so the dollar was dumped in wholesale fashion. Risk was in vogue. The greater the risk, the greater the reward today. Dollar sales accelerated after a successful 30-year bond auction by the US Treasury as risk lovers ploughed into AUD, GBP and EUR. Real money were big buyers above the 1.6500 level helping drive prices as high as 1.6620 before late profit-taking. EUR/USD reached 1.4177 after stops above 1.4150 were triggered. AUD came with about 25 pips of testing trend highs before a pullback. Fear of heights and the fact that trend highs at 1.6661 in Cable and 0.8263 in AUD failed to be overcome sent traders for the side lines very late in New York. A sharp pullback in the equity market late in the day helped raises doubts among the currency bulls. EUR/USD slumped back to 1.4090 from its intraday highs. Many will be majorly disappointed. Markets could be quite illiquid on Friday as there are no major releases. Traders may look to book profits before liquidity completely dries up.