My Blog

Risk-sensitive currencies like EUR, AUD, CAD retreated as market optimism that blossomed in earlier sessions faded a bit; currencies kept mostly to narrow ranges, though. "I think the theme of market optimism is wearing off somewhat at this point, but I don't think the market is gaining direction either way," says Vassili Serebriakov at Wells Fargo Bank.

EUR/USD at 1.3175 late, vs 1.3225 Wednesday, USD/JPY at 99.33 vs 99.46, EUR/JPY 130.94 vs 131.56. EUR had started to decline overnight, particularly after China reported worst quarterly economic growth in nearly two decades; it fell to 3-session low of $1.3126 and more than 2-week low of Y129.36. Not much clarity from data: New U.S. claims for state unemployment benefits unexpectedly plunged last week; home construction took bigger-than-expected drop in March, but economists did foresee a significant fall after surge in February.

Stocks gained with Nasdaq hitting highest level since November, as investors bet on an economic recovery by buying tech and consumer stocks like Google, Nokia, Walt Disney, H-P; DJIA +1.2%, highest close since Feb. 9, Nasdaq +2.7%, Philly semicons +3.4%.

Treasurys hit by wave of afternoon selling on disappointment at latest round of Fed bond purchases, rallying stocks and competing supply from JPMorgan Chase; JPMorgan's $3 billion, 10-year note sale, following company's earnings report that beat analysts' forecasts, was viewed as a sign credit market stress continued to thaw as offering isn't backed by FDIC. 2-year note down 3/32 at 99 30/32 to yield 0.9%, 10-year down 20/32 at 99 8/32, to yield 2.84%. Comex June gold fell $13.70 to $879.80/oz; May Nymex crude +73 cents or 1.5% at $49.98/bbl.