- US equities open on lows, recover for most of session
- S&P Case Shiller home price index flat in March
- US consumer sentiment rises strongly, to 63.3 from 57.7
- ECB rumored to be preparing for 50 bp rate cut
- North Korea severs relations with South Korea
- Obama calls for nearly $200 bln more in stimulus
- Geithner to advise European officials to perform bank stress test: CNBC
- Greece announces privatization plans
- Three Fed districts asked for discount rate rise in April
- Fed’s Bullard: Expects bond purchases to be unwound over five year period
- US equities pare losses sharply in US trade, recover all of 3% drop. US bond yields rise from trend lows as stocks reverse. 10 year note reaches 3.07% intraday, end at 3.17%
Markets were in turmoil when the US walked int he door this morning. Spanish banking jitters had triggered another round euro selling and concerns over banking woes were heightened enough for the market to entertain rumors that both the Fed and ECB would enact new liquidity facilities while talk of an ECB rate cut of 50 bp made the rounds late in Europe.
US markets bottomed almost as soon as they opened and the euro began to lift off lows early on. Buyers were seen in the 1.2180s, keeping EUR/USD just north of the London low at 1.2177. Short-covering accelerated as EUR/USD moved above the 1.2240 level and prices really never looked back. We reached the 1.2340 area late in the day as US shares turned positive. Trendline resistance on the short-term charts around 1.2335 and talk of Chinese sales into strength helped to slow the momentum of the powerful intraday bounce.
USD/JPY recovered sharply as well, triggering heavy stop-loss buying from short-term specs when we moved back above the 90.00 level; 90.25 as the late session high. EUR/JPY was turbo charged, rising from 108.83 during the US morning to end at session highs of 111.30.
Cablle, AUD and CAD all rebounded along with the euro late in the day but cable lagged as EUR/GBP rebounded from its early slide. The cross ends at 0.8573 from 0.8508 lows.