Archived IMT (2011.02.07)

The ever volatile German factory orders fell 3.4% in the month ending in December, following a 5.2% surge in November. The December decline was the biggest since September, but the upward trend in capital goods orders remained intact. The data served as a convenient catalyst to extend the euros losses across the board after Thursdays ECB press conference dampened expectations of a looming ECB hike. Euro technicals poin to $1.3520 being the important 100-day MA. A breach of which risks $1.3280 as early as this week. We are seeing CLEAR DIVERGENCE between rising stocks and stabilizing/strengthening USD, whereby the latter emerges after the EU session. EURO YIELD SPREADS CONTIUE TO BE DAMAGED, with GE-UK 2-year yields at -0.19% (lowest since Jan 19) and GE-US 2-year yields at -0.58% (lowest since Jan 17). A relatively light economic calendar in the US will give way to further earnings and testing new 2.5-year highs in equities, but once again the inability for EUR, GBP, CAD and AUD to maintain their session highs and lose 0.5-0.6% thereafter attests to the impact of rising USD yields in favour of USD.