Philly Fed Misses, BOE’s Weale Dovish

Risk trades slipped on a disappointing Philly but overall moves were choppy. The pound was the top performer while NZD lagged. The Asia-Pacific calendar is light. Premium trades existing in EURUSD, USDJPY, GBPUSD, EURJPY, USDCAD and gold. The remaining silver short hit all targets and so did 1 Gold short, keeping 2 in progress and 3 unfilled. Full access can be seen in the latest Premium Insights.

Yesterday's Beige Book affirmed that the Fed remains upbeat about the recovery but today's economic data raised another set of questions. The Philly Fed was at 1.3 compared to 3.0 expected, which alone isn't bad but the key sub-indexes on employment and new orders slumped. Leading indicators also slipped 0.1% compared to a 0.1% rise expected.

Earlier data on initial jobless claims at 352K were essentially in line with the consensus.

Following the Philly Fed, risk trades slumped and USD/JPY fell to 97.92. Yen crosses also hit the lows of the day at that time. Afterwards stocks continued to deteriorate but FX rebounded and spent the remainder of the day moving sideways.

In the UK, an interesting development was a comment from the BOE's Weale that he might support futher easing. He conceded that growth may have contracted in Q1 and said lower inflation improves the case for more stimulus. The most-recent MPC minutes showed a 6-3 vote against QE that would fall to 5-4 if Weale switches his stance.

Cable rallied to a session high of 1.5313 moments before his comments but have sank back to 1.5278 since.

In the upcoming session, headlines from the G20 will continued to percolate. The lone interesting data point is at  0430 GMT when Japan releases its all-industry activity index for February.