Euro Supported By Lower Yields, Draghi Mum on ECB Purchases

German annual PPI lower; Italian industrial orders drop; 10 year periphery bonds yields decline slightly; Canadian annual CPI declines. Market turns to US and Canadian leading indicators. As market retraces & EURUSD rebounds, those who were not filled in yesterdays trades will get a chance to do so now.

The USD is slightly weaker today as market participants take profit and square positions after large moves seen this week. GBP and CHF are the relative strength winners today as they strengthened against most other majors. European equity markets are losing between 0.5% and 1%.

On the European data front, German annual PPI printed 5.3% in October down from previous 5.5% and Italian industrial orders dropped -8.3% in September after growing 4.2% in August which is the largest decline since mid 2009.

ECB president Mario Draghi reiterated during his speech that economic activity is expected to weaken in most advanced economies and noted increased downside risks in the Eurozone. However, he did not provide any insights as to what additional steps can the ECB take in order to cope with the crisis. Not surprisingly, France would like the ECB to implement mechanisms that would prevent additional yield increases while Germany believes that the ECB is not authorized for a more significant market intervention. Draghi did hint the ECB could consider further steps to relieve banks of liquidity strains, saying We are aware of the current difficulties for banks due to the stress on sovereign bonds, the tightness of funding markets and the scarcity of eligible collateral.

As market retraces & EURUSD rebounds, those who were not filled in yesterdays trades will get a chance to do so now. Click here for those trades http://ashraflaidi.com/products/sub01/access/ ?a=552 Click here to get a 1-week trial http://ashraflaidi.com/products/sub01/Premium Subscribers wishing to get SMS alerts of ONLY the Premium Intermarket Insights can send their mobile phone number to Subscription AT Ashraf Laidi Com

The ECB is said to be aggressively buying Italian and Spanish bonds today which helped to push the Italian 10 year yield back below the critical 7% to 6.80%. French 10 year yields 3.60% and Spanish 6.44%. Spanish-German 10 year yield spread narrowed to 4.51% after it exceeded 5% earlier today.

Canadian October CPI printed 2.9% from previous 3.2% on annual basis while the core annual CPI showed 2.1% from 2.2%.

Canadas leading indicators rose 0.2% in October from Septembers rise of 0.1%. Market had expected +0.1%

US leading indicator index is due at 10:00 am ET and is seen higher in October at 0.6% from previous 0.2%.

USD to watch Dallas Fed president Fisher speech at 1:15 pm.