Financial markets were boosted Thursday as US housing and jobless claims data beat expectations. This overshadowed further delay in the Greek rescue deal. The market appeared to adopt a 'wait-and-see' mode to interpret Junker's comments that Greek aid package would be agreed at Monday's Eurogroup meeting. Wall Street soared with DJIA and S&P 500 gaining +0.96% and +1.10% respectively. In the commodity sector, oil prices rallied on encouraging US economic data and concerns over Iran's nuclear development program. Gold initially plunged to a 4-day low of 1706.7 before bouncing back to 1728.4, largely flat at close.
The situation in Greece dragged on. The EU meeting will be held on Monday but the market remained uncertain whether the rescue plan will be awarded. Meanwhile, some rumors emerged that European Governments are considering cutting the interest rate on Greece's emergency loans and the ECB might give up profits earned on its Greek bonds. The central bank might exchange its current Greek bonds for bonds that would be exempt from any collective action clause. This raised hope that the PSI deal would be finalized soon.
US' initial jobless claims surprisingly fell -10K to 348K in the week ended February 11. The market had anticipated a rise to 364K. The 4-week moving average fell -2K to 365K, the lowest reading since March 2008. Moreover, continuing claims declined -100K to 3426K, following a downward revision, following upward of the previous week's number to 3526K Regarding the property market, housing starts climbed +42K to 699K in January, compared with consensus of a drop to 364K. Building permits slipped to 676K from 679K, compared with market expectations of 670K. Philly Fed Survey unexpectedly soared to 10.2 in February from 7.3 in the prior month.
On the dataflow today, US inflation probably show further moderation with headline CPI easing to +2.8% y/y in January from +3.0% a month ago. Core CPI might have stayed at +2.2% during the month. Leading indicators is expected to have climbed +0.5% in January from +0.4% in the prior month.