• US weekly jobless claims fall 6,000 to 403,000
  • Japan may add extra budget to to aid companies hurt by yen ; market underwhelmed
  • Gaddafi and son killed
  • Philly Fed index soars most in 30 years; +8.7 from -17.5
  • Fitch: Outlook for largest Italian banks is negative
  • Sec0nd EU summit scheduled no later than Wednesday in Berlin to agree ambitious, comprehensive EFSF and bank recapitalization plan: EU
  • Bloomberg: EU weighing combining EFSF and ESM to increase bailout lending to EUR 940 bln
  • Berlusconi nominates Ignacio Visco to head Bank of Italy
  • Greek parliament enacts austerity law
  • Bloomberg: EU mulling options for revised Greek debt exchange; one option would replace Greek debt with EFSF bonds after haircuts applied
  • S&P 500 rises 0.4% to 1215
  • US 10-year note yields rise 3 bp to to 2.18%
  • WTI falls 0.81 to $85.30; Gold falls $19 to $1621

Another wild day of rumor and counter-rumor. For a time, it looked as though the Sunday EU summit would be canceled; in the end, there will be two summits, one on Sunday and another no later than Wednesday. An ambitious and comprehensive package is being touted no later than the 26th. We’ll believe it when we see it.

EUR/USD benefits at the end of the day from very bearish sentiment building up in the short-term on the clownish behavior of the EU and its various offshoots. Once it looked like they had cobbled together a plan to have a plan, we bounced on short-covering. A major plus from the risk perspective was the huge bounce in the Philly Fed index, an index that correlated very closely with ISM.

CHF has its best day in more than a month on fears the EU will not even kick the can down the road, We fell below 1.2300 during the US session before bouncing to close at 1.2320. That alone should give you some sense of the jitter state of the market.

Liquidity stinks as many repair to the sidelines, waiting for the headline storm to subside. Whipsaw price action has croaked many a good position and enticed many to jump into position at inopportune levels. Do that eough and people get fed up, and withdraw….