The correlations witnessed over the better part of 2009 were back in vogue in NY trading. US equity markets managed to eke out a 0.4% gain in what was an extremely choppy trading session. Economic data was scarce with only the US wholesale inventories report being noteworthy. They rose 0.3% in October, while the market was looking for a -0.5% print. This adds some upside risk to current 4Q growth estimates and suggests the potential for a larger than anticipated inventory build. The usual weekly crude oil inventories were also released and they showed a massive -3.8 million barrel draw. The consensus was looking for a modest build, so the surprise was palpable. Surprisingly, however, crude oil sold off on the back of the numbers as traders look to have been more focused on the inventory build of final product (gasoline and distillate stockpiles both rose on the week).

Nonetheless, the recovery in equities saw the US dollar come back under pressure. In the end, the buck decline roughly -0.3% against the majors. EUR/USD and stocks traded in tandem all session with the pair printing its lows near 1.4675 as stocks plumbed the depths, only to rise back towards 1.4730 ahead of the close. NZD/USD was a big mover in NY trading. The RBNZ decided to leave rates unchanged at 2.5% as expected, but Bollard hinted that the bank will indeed begin raising interest rates in mid-2010. Moreover, he sounded a less cautious tone with regards to NZD strength of late and its potential to harm export growth. Kiwi promptly squeezed from 0.7120 to above the 0.7200 area. The 200hr sma at 0.7180 is important short-term support now and a move back below could see a sharp reversal here.