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The  Philly Fed Manufacturing Index scored +8.7 points, far better than -9 that was expected. US  Existing Home Sales rose to a pace of 4.91 million, only marginally lower than 4.94 that was predicted. The big surprise in the Philly Fed Index improves the mood in the markets only temporarily.,The markets remain obsessed with every headline from the European debt crisis.

EUR/USD bounces off lows but doesn’t really recover. GBP/USD, AUD/USD also edge up as “risk currencies” gain minimal strength.

It’s important to note that the  Philly Fed Manufacturing Index is a fresh figure, that looks at the current month. The drop to -30.7 points two months ago was a bitter disappointment that shook the markets. It later recovered to -17.5 points, but the negative number still implies worsening conditions. This return to positive numbers is very good news for the US.

Earlier, weekly jobless claims hit 403K, within expectations and still above 400K. Dips below this number seen beforehand couldn’t be repeated.

The euro continues moving mostly on news or rumors regarding the debt crisis. The detailed conditions under which the EFSF will buy bonds gives the ECB strong powers. A leverage or no leverage of the EFSF also consumes a lot of headlines towards the EU Summit on Sunday, that might be postponed. A lot of fog that controls the markets…

For more on the euro, see the EUR/USD forecast.