Archived IMT (2010.12.14)

USD STABILIZES AS SOARING US 10 YR YIELDS yields hit a fresh 6-month high at 3.47%, blatantly ignoring the QE2 and increasingly leaning towards the fiscal-GDP construct that is driving bonds. The broadly positive Nov retail sales report was accompanied by upward revisions in Sept & Oct. *** US-German 10-year yield spread **** (US minus German 10 yr yields) hits 43 bps, the highest since August and breaking above its 200-day MA for the 1st time since July. EURUSD has yet to confirm Mondays rebound as it must maintain a close above $1.34 for a convincing break above the 55-week MA ($1.3380). This is a case of technical failure justifying faltering fundamentals (lack of definite Irish agreement, prolonged dissent regarding Eurobond issue among EU and Fitch talk of a downgrade of Belgiums AA+ rating in light of political uncertainty). EURUSD remains vulnerable to retesting $1.3250, followed by $1.30.

**** ASHRAF's VIDEO MARKET HIGHLIGHTS **** on #sterling, $EURUSD, Tankan, Pre FOMC, Norges, Riksbank http://bit.ly/gJ3aBj