The flight to risk witnessed overnight held up in the NY session as the pre-open gains on the news of yet another government bailout (to the tune of $800 billion) held up. Stocks ended the day up modestly on the back of two days of stellar gains. In an encouraging sign, the S&P 500 managed to close above the critical 850 support level. The rally in stocks was despite a move higher in bonds as well, on the back of some strong auctions that suggest demand for US paper remains firm. The 10-year yield was 24 bps lower (price higher) while the 2-year saw a more modest decline of about 6 bps.
Risk trades in FX land headed higher in a big way. EUR/USD jumped more than 230 points and was sitting near 1.3050/70 as the NY session was coming to a close. EUR/JPY added about 150 pips into the 124.60/70 area though USD/JPY slipped more than -50 pips towards 95.40/50 as USD weakness outweighed overall JPY strength. One of the biggest movers was Cable as GBP/USD soared more than 450 points and was just below the 1.5500 mark into the close. The continued deterioration in UK economic fundamentals suggests this could prove a good selling zone.
Upcoming Economic Data Releases (Asia Session) Prior Estimate
- 11/25/2008 22:00 GMT US ABC Consumer Confidence 23-Nov -52 - -
- 11/26/2008 0:30 GMT AU Construction Work Done 3Q -2.60% - -
