Modest CAD GDP, Chicago PMI rises, Spending Lacklustre

German retail sales disappointed but labor market improved; Japan approved budget for next fiscal year; Spanish and Italian yields rose. US jobless claims +38K from prior week's 5-year lows, US Dec personal income jumped 2.6% from 1;0% due to lump sum social security payments; personal spending +0.2% from +0.4%. Chicago PMI at 55.6 from 50.0. Canadian Nov GDP +0.3% m/m from +0.1% and +1.3% y/y from +1.1% y/y. Wednesday's long EURUSD Premium trade hit its 1.3580 target, while Thursday's EURUD trade remains in progress. We also added trades on GOLD, SILVER and US CRUDE OIL with 2 new on gold, 1 new on silver and 2 new on oil.

German data was mixed today. Retail sales disappointed as they fell sharply in December 1.7% from previous 0.6% growth but the unemployment declined 16K in January, which helped to pushed the unemployment rate down to 6.8% from prior 6.9%. EURUSD started off by falling to 40 pips to 1.3545 before regaining ground to 1.3594.

Japanese government approved a draft budget for the fiscal year 2013/2014 totaling USD 1.02 trillion. The first budget presented by the new PM Abe marked a symbolic improvement for the first time in seven years. However, when combined with the extra stimulus plan signed off earlier this month, which is financed in more than half by new bonds, it drives borrowing to new highs, Bloomberg reports.

In other news, UK Nationwide house prices rose 0.5% in January after a flat reading in December and French consumer spending was flat. GBPUSD is weaker trading around 1.5790.  

Spanish and Italian 10 year yields rose today hitting 5.31% and 4.41% respectively.