The NY session saw a modest reversal in previously witnessed overnight risk aversion. US stocks declined more than -1.5% nonetheless but a late day rally helped recover many of the steep losses in early trading. US yields were lower on the front end with the 2-year slipping -5 basis points towards 0.72% on the day. Most pairs in FX ultimately traded sideways.

Poor economic data out of the US, with jobless claims jumping to 589K from 527K and housing starts collapsing to a bleak 550K, had little impact on the buck as safe haven demand is likely still prevalent. EUR/USD was a meager 10 pips higher in the session and closed near the 1.30 pivot. Expect a barrier into 1.3080 overnight with support lurking by 1.2950 initially. The yen crosses were modestly higher overall. USD/JPY added about 30 pips and was sitting near 88.90/95 as the session came to an end. EUR/JPY meanwhile was 50 pips higher into the 115.50/60 zone.

A surge in crude oil inventories by 6.1 million after a 1.1 million build last week elicited just a modest pullback in crude prices, with the commodity sitting just above $43/bbl at the close. USD/CAD was about -70 points lower to 1.2545/50 as the Bank of Canada Monetary Policy Report suggested that the Canadian economy will recover quicker than prior recessions this time around - and this offset any upward pressure from lower oil prices.

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