Risk Trades Bounce Back After Early Fall

Concerns about Italy and Portugal weighed on the euro while data continues to paint a mixed picture of the US. On the day, JPY was the top performer while AUD lagged but in the latter part of the US session risk off trades pared losses. In Asia, Japan releases tier 1 data on employment, inflation and industrial production. Thursday's Premium Intermarket Insights look at the latest on the Euros attempt at the Golden Cross, trades on EURUSD, EURJPY, US Crude, and charts on BRICs vs S&P500. http://ashraflaidi.com/products/sub01/access/?a=621

EUR/USD slumped to 1.3251 early in US trading but rebounded above 1.33 at the end of the session. Early weakness came on concern about Italian debt as yields rose to a one-month high. Portugals central bank also revised down its GDP estimate to a 3.4% contraction versus 3.1% previously.

The strength of the US recovery also remains a concern with initial jobless claims at 359K compared to 355K expected, the prior weeks report was also revised 16K higher to 348K. US Q4 GDP was unrevised at +3.0%.

M&A related to Gaz de France purchases in the UK was reported to underpin broad GBP strength.

Bernanke wrapped up his lecture series, saying there is a reasonable chance the US could return to 3% growth in the long term. That stood in contract to the Feds Plosser who forecast 3% growth this year and next.

A rebound in US stocks late in the day helped risk sentiment, as did comments from Germanys Schaeuble who said he sees a firewall of around 800 billion euros.

Asia-Pacific Preview

Japan is the major focus as it closes out its fiscal year with a deluge of data. It begins at 2330 with February jobless data. The unemployment rate is expected to steady at 4.6%. At the same time, the national CPI is expected to be flat year-over-year in February and to fall 0.9% excluding food and energy. At 2350 GMT, preliminary February industrial production is expected to rise 1.3%. Later, data on Australian home sales and Japanese housing starts will also hit the wires.