NY Session: Markets Mixed as Slovak Parliament Debates EFSF

The U.S. dollar was broadly mixed in a choppy session, firmer against the GBP, CAD, CHF, and NZD while losing ground against the NOK, EUR, SEK, AUD and JPY at time of writing. The euro rose as the Slovak Parliament debated on the EFSF ahead of today’s vote. Slovakia is the last of the 17 nations to vote on the enhancements which require unanimous approval. Slovak Finance Minister Miklos said earlier in the day that Slovak lawmakers will eventually approved the EFSF changes which helped to support the common currency. EUR/USD advanced towards the 1.37 figure but may face resistance around the 38.2% Fib retracement (of the decline from Aug. highs to Oct. lows) which comes in around the 1.3685/90 zone.

Economic data released in North America included the Oct. IBD/TIPP economic optimism which unexpectedly rose to 40.3 from the prior 39.9 (forecast was for a decline to 39.4) and Canada’s Sept. housing starts climbed to 205.9K from the previous 191.9K. The better than anticipated housing data did little to support the Loonie. USD/CAD rose back above the 1.03 figure and is trading higher on the day despite stronger oil.

The U.K. NIESR GDP estimate showed that although growth may have accelerated in Q3, it remains anemic with a 0.5% growth estimate as compared to 0.4% in Q2. Earlier today, U.K. industrial production came in stronger than expected (+0.2% m/m vs. exp -0.2%) while manufacturing production fell by more than forecast (-0.3% m/m vs. exp -0.2%). MPC member Adam Posen was on the wires today and said that the BOE will expand QE again if needed. He also noted U.K. ties to the European economy saying that the euro crisis is a ‘big’ potential risk to the U.K. The pound was weaker across the board and down nearly 1% against the NOK on the dovish comments and soft data.

U.S. equities were choppy throughout the day and ultimately finished the session mixed. The Dow Jones Industrial Average slumped to close lower by about -0.15% and the S&P 500 climbed slightly higher by around +0.06%. Precious metals were also mixed with gold falling by around -0.55% while silver is currently higher by around +0.31%. U.S. 10-year Treasury yields advanced about 8 bps to around 2.16%.

Economic data due out of the Asia/Pacific session are New Zealand QV house prices for September, Australia’s October Westpac consumer confidence index, and Japan machine orders for August.