The Euro experience a relief rally as Greek and Spanish bonds rallied relative to bunds and currency traders pushed the Eurozone currency higher. Today was a light volume day for the US equity markets as most of the Eastern half of the US was covered in a blanket of snow. The S&P 500 index move up 2.77 points to close at 1105. The EUR/USD rallied 65 points to close about 1.36 at 1.3612. Oil rallied $1.5 per barrel to close at $79.70. The EUR?USD is now trading in a 3 big figure range with strong resistance close to 1.37 and support near 1.3430.
In US economic news, Sales of used homes decreased by 7.2%, to a 5.05 million annual rate, the National Association of Realtors said Friday. Economists surveyed by Dow Jones Newswires expected sales to increase 0.9%, to a rate of 5.50 million. The surprise decline followed a revised 16.2% drop in December to 5.44 million. NAR originally estimated December sales fell 16.7%, to 5.45 million.
Gross domestic product rose at a 5.9% annual rate October through December, the fastest rate since the third quarter of 2003, according to the Commerce Department. GDP expanded by 2.2% in the third quarter of 2009. A month ago, the department first estimated that GDP ,rose by an annual 5.7% in the fourth quarter. For all of 2009, GDP declined an unrevised 2.4%, which was the largest full-year contraction since the 10.9% drop in 1946. The economy expanded 0.4% in 2008 and 2.1% in 2007.
In Asia the Tokyo February CPI y/y rate was reported at -1.8% y/y while the nationwide January inflation rate ran at -1.3% y/y (from –1.4%), with core CPI unchanged, at -1.2%. Continued weakness in the consumer sector (hardly a surprise at a time of struggling labor market and depressed real disposable income) was highlighted by the January large retailers’ sales (reported at a worse than expected –5.6%), but retail trade was up by a larger than expected 2.9% on the month. A further sign of a sluggish domestic demand is the continued weakness observed in the housing sector and the January housing starts reported yet another negative reading, but again not as bad as expected, at –8.1% y/y.