The overnight euphoria back into risk assets remained prevalent on the back of news that a major troubled US bank is expected to report its best quarter of earnings since 2007. European bourses are up +1.8% on average while US futures are pointing to a +2.0% jump at the open. Gold lost some more of its luster and is currently down more than -$8 to 914/913 in early NY. Down trendline support from the Mar-08 and Jul-08 highs lurks by the 900 mark and up trendline support from the Nov-08 and Jan-09 lows is 890/889 as well. Look for potential buying interest to emerge on a move into this zone.

The USD managed to eke out a modest rally in London trading despite the overall bid tone to risk assets. European economic data helped the greenback as it continues to print rather weak. The highlights out of the eurozone were the German trade balance – which rose a weaker than expected 8.5B from 7.3B – and French industrial production – which collapsed -3.1% in Jan to a new record low -13.8% annual rate. EUR/USD shed about -25 pips in the session thus far and was sitting near 1.2680/90 ahead of the NY open.

The news out of the UK was no better as industrial production plunged -2.6% in Jan to an annual rate of -11.4%, the worst read since 1980. If that wasn't enough, home sales fell to the lowest level since 1978. Cable was able to hang on to overnight gains against the buck despite the poor data. GBP/USD was practically unchanged in the session near the 1.3820/30 area.
The pair looks to be in an hourly bear flag formation, however, and a break below 1.3780/70 could see things get ugly very quickly here. Back above 1.39 breaks this pattern.

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  • 3/10/2009 12:30 GMT US Bernanke Speaks on Bank Regulation

  • 3/10/2009 13:00 GMT AU Australia Manpower Survey 2Q - - - -

  • 3/10/2009 14:00 GMT US Wholesale Inventories JAN -1.40% -1.00%

  • 3/10/2009 14:00 GMT US IBD/TIPP Economic Optimism MAR 44.6 - -

  • 3/10/2009 21:00 GMT US ABC Consumer Confidence 8-Mar -49 -49