News across the pond continued to look bleak and overnight risk aversion remained prevalent in London trading. Banking stocks led the way lower on news that an insurance protection plan for a major UK bank will lead to major shareholder loses, while another large UK bank dropped on loan loss concerns. European bourses are down about -2% at last look and US stocks are following lower as well in futures trading. The US dollar was once again the beneficiary of the flight to safety.

EUR/USD sank about -45 pips in the session thus far and was sitting near the 1.2580/90 area ahead of the NY kickoff. We expect 1.2550 and then 1.2500 to provide a good base in the near term. GBP/USD collapsed another -200 pips towards 1.3880/90 as the dip below 1.40 saw the pair come off pretty violently. USD/JPY rallied about 75 pips to just above the 99 mark as the buck continues to outperform the yen and continues to solidify its place as the sole safe haven currency.

Not much data due up now in NY and the only noteworthy piece is Canada housing starts at 815am ET. The market is looking for a decline to 145K in February after a 154K print the prior month. Worse than expected results should see USD/CAD make another bid towards the 1.30 level. Other than that, expect the market to be keenly focused on the goings on in the equity markets. EUR and JPY crosses should follow stocks rather closely.

Upcoming Economic Data Releases (NY Session) prev est

  • 3/9/2009 12:15 GMT CA Housing Starts FEB 153.5K 148.5K

  • 3/9/2009 16:00 GMT EC Euro-Area Finance Ministers Meet