Risk appetite was back in vogue once again as US equities posted their third consecutive daily increase. The S&P closed up 4% by the 750 area and is now up more than 12% since the 666 low last week. Recall that bear market rallies in excess of 20% are not uncommon in this sort of environment. Indeed, back in 2001-02 we witnessed quite a few of these on our way into the ultimate lows. So ultimately this could just prove to be a brief retracement on the way to new 2009 lows.

US Treasuries were also bid despite the overall flight to risk in stocks. The 10-year yield sank about -4 basis points to 2.86% after the 30-year bond auction showed robust demand for US paper. Gold was also $16 higher as the weakness in CHF had investors seeking out another safe haven asset. The precious metal was sitting near the intraday highs by 925 and we would expect potential to 940/950 next. Solid support still lurks by 895/890 as well.

The rally in risk was prevalent in FX land as well. EUR/USD jumped 100 points to 1.2910/20 in NY trading after a break of the overnight highs by 1.2870 elicited a nice rally. EUR/JPY rocketed 250 pips to just above the 126 level while USD/JPY jumped more than 100 pips into the 97.50/60 area. USD/CAD backed off from a high near 1.2950 on higher oil prices. Crude managed to post a stellar 10% rally into the 46/47 area as more saber-rattling from OPEC on the topic of production cuts had the commodity better bid. Loonie shed nearly -100 pips in the session into the 1.2780/90 zone.

It was Swiss franc weakness across the board as the SNB intervened in the markets in a successful attempt to weaken the currency. The SNB cut rates -25 basis points as expected but noted their intent to intervene on the follow. This sent USD/CHF from about 1.1590 to a high near 1.1970 in a matter of minutes. The pair backed off on profit taking and was sitting near 1.1840/50 ahead of the NY close. EUR/CHF also shot up an impressive 500 pips and was right by the 1.5300 highs at last look.

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  • 3/13 4:30 GMT JN Industrial Production (MoM)  JAN F  -10.00%  - -
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  • 3/13 4:30 GMT JN Capacity Utilization (MoM)  JAN F  -11.80%  - -
  • 3/13 5:00 GMT JN Consumer Confidence  FEB  27  - -
  • 3/13 5:00 GMT JN Consumer Confidence Households  FEB  26.4  26.5