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Monthly data for April included blowouts in new home permits and starts, which in turn lifted the index of Leading Indicators up strongly. Existing home sales disappointed somewhat. Consumer prices increased slightly due mainly to shelter costs. The Philly Fed manufacturing index was mildly positive.
Hale Stewart is a former bond broker who has been writing about economics and financial markets since 2006 on the Bonddad Blog. He is also a tax attorney with a domestic and international practice while also forming and managing captive insurance companies for US companies. You can follow him on twitter at:@captivelawyer
The dollar shot broadly higher after the hotter April U.S. CPI data, crushing EUR-USD to 1.1020 lows from 1.1208 highs posted in London. USD-JPY spiked up to a better than two-month high over 121.55, while the combination of hot U.S. CPI, and cooler Canadian CPI resulted in USD-CAD trading over 1.23 briefly. Cable dove under 1.55 from London highs over 1.5670. A long weekend in both the U.S. and U.K. resulted in dwindling price action early bin the session, with most action over and done with by mid-morning N.Y. time.
EUR-USD lifted to a high of 1.1208 following an above-forecast rise in the German May Ifo business conditions survey and with Draghi saying that the Eurozone outlook is the best for seven years. There is also market talk of a option with a 1.1200 strike expiring at today's New York cut, which in theory could exert a gravitational pull around this level, and of general euro short trimming ahead of holidays in the States and UK on Monday. USD-JPY settled around 120.70-80 after extending in London below Tokyo low to a new two-day nadir at 120.63.
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