Markets not too frisky; that would be too risky

Equities are under intense pressure this morning, helping push EUR/USD modestly through 1.2550 in Asia, tested here just a short while ago. Financial shares remain a source of great uncertainty with heroic government efforts to keep “systemically important” institutions afloat paying scant dividends in terms of market confidence.

Dealers remain reluctant to short EUR/USD too aggressively on the 1.25-handle, having seen sharp bounces from these levels repeatedly in recent months. Rumors of barrier options at 1.2500 persists as well, traders say.Offers are eyed on rallies to 1.2610/20 near-term.

Expect liquidity in the US to be thin owing to a large coastal snow storm. Machines will handle an even larger percentage of the market-making today.