Euro Softer As There Is No News Out Of Athens

Sentiment deteriorated as Greek debt talks continued with no new developments to announce and after softer U.S. labor and housing data. The IIF left markets with little information to digest other than that 'some progress' was made in Athens today and that talks will resume tomorrow. The dollar started the session significantly lower and managed to regain some of its losses as traders took profit ahead of key technical levels. Despite a late day rebound, the US dollar remained softer against most of the majors. EUR/USD stalled ahead of the daily ichimoku cloud base and 38.2% Fibonacci retracement level (of the decline from Oct. highs to Jan. lows) which comes in above the 1.32 figure. The pair saw session highs of nearly 1.3180/85 before correcting lower to current levels of around 1.31.

Economic data released this morning came in mixed with a disappointing rise in weekly initial claims to 377K from the prior 356K (cons. 370K). December leading indicators came in lower than expected at 0.4% (cons. 0.7% prior 0.2%) and new home sales in December unexpectedly fell by -2.2% to 307K from the previous 314K (cons. 321K). Positive data included better than expected durable goods orders which increase 3.0% (cons. 2.0%) and the Chicago Fed national activity index which was surprised with a positive reading in December of +0.17 from the prior -0.46 (cons. -0.12).

U.S. equities reversed earlier gains as sentiment declined with the DJIA falling to close the day lower by around -0.18% while the S&P 500 finished the session to the downside by -0.57%. Commodities continued to outperform on the back of a weaker dollar with gold, silver and oil currently higher by +0.55%, +0.61% and +0.37% respectively. WTI crude spent most of the session above the 100 level but has since declined below the daily Tenkan line to current levels of around 99.80. UST yields remained under pressure after yesterday's FOMC meeting and 10-year yields shed about 5.8bps to around 1.936% at time of writing.
Due out shortly are New Zealand trade balance figures which are expected to show a narrowing deficit to -50M in Dec. from the prior -308M with exports expected to climb to 4.11B from 3.91B while imports are forecast to decline to about 4.10B from the previous 4.22B. The kiwi (NZD/USD) has continued its ascent and approached October highs of just below the 0.8250 level. The trade balance figures will be watched closely as RBNZ Governor Bollard noted yesterday that currency appreciation is reducing exporter returns. Also due out of the Asia/Pacific session are Japan's national (Dec.) and Tokyo (Jan.) CPI figures and retail trade numbers for December. The Bank of Japan also publishes the minutes of its Dec. 20-21 board meeting.