ForexLive Americas Wrap: Markets Stumble on Philly Fumble

Philly Fed -12.5 vs +1.1 exp
Initial jobless claims +362K vs 355K exp
Markit US PMI 55.2 vs 55.5 exp
IMF says concerns over drop in yen seem ‘overstated'
US Jan CPI +1.6% y/y, as exp
US Jan existing home sales 4.92m vs 4.90m exp
US Jan leading indicators +0.2%, as expected
Wal-Mart warns of soft US consumer
ECB publishes bond holdings
Poland revised to positive from stable by Fitch
HSBC cuts cable forecast
Fed's Bullard: Asset purchases could be ‘reduced somewhat' as labor markets ‘improve somewhat'
Fed's Williams: Jobless rate to stay above 7% at least until the end of 2014
Fed's Fisher worried about housing speculation
BOE's Miles: “Good case” can be made for more expansionary monetary policy
JPY leads, EUR lags

The market was not in the mood for soft US economic data. The combination of soft initial jobless claims and a weak Philly Fed sapped risk appetite. The straightforward trade on risk was to sell the commodity currencies while cross-currents in other pairs made trading more difficult.

The euro was weak on soft European PMIs but traders are also paring back risk ahead of Italian elections.

It's a similar story for the yen. Abe could name a BOJ nominee as soon as Monday and the announcement will likely come sometime next week.

The yen crosses have been beaten down but they showed some sign of stabilization in US trading. USD/JPY fell just low enough to take out the European low -- touching 92.77 -- but it quickly rebounded to 93.17. Other yen crosses have also bounced late in US trading.

Speaking of bounces, gold was up $12 to $1576 and the +$40 drop yesterday.

Stocks were soft after the economic data but the S&P 500 has made a late comeback and is down just 0.4%.