Markets were mixed in NY trading and with little direction in the risk trade the US dollar was left trading mostly sideways. Equities added a modest 0.3% while Treasuries traded better bid on the back of yet another robust note auction. The 10-year auction was well oversubscribed, with a 3.01 bid-to-cover ratio and this throws some cold water on the notion that investors are shunning USD assets.

Gold managed to tack on a couple of dollars to its recent parabolic rise. Notice, however, that even while gold has made new highs, the USD index has not made new lows. In other words, this rally in the precious metal looks more like speculative fervor than a currency alternative story. Brent crude oil sank like a stone after posting a session high near $69/bbl. Despite lower than expected weekly oil inventories, the massive three million barrel build in gasoline stockpiles scared the bulls off and Brent was down near $67.50/bbl as the session came to a close.

USD/JPY was the main attraction in the currency space as it plumbed the depths to an 88.01 low ahead of the session open. Middle East interest took the pair markedly higher to a session high 89.40 †where a daily trendline also lurks. The pair would eventually squeeze back down towards 88.60 and still has an overall heavy feel to it. The rollercoaster ride likely left many in the trading community feeling queasy. Currency markets remain choppy ahead of the Asia session and we have Australian employment due up at 2030ET. Better than expected results should see AUD/USD make another bid for the 0.8950 zone.