The global stock market rally continued unabated through London trading as markets continue to shrug of weakening economic prospects. This is despite yet another cut to 2009 global growth estimates to -1% by a major investment house. Hope that recent comments from bank CEOs that they will be profitable in 1Q 2009 continued to support the gains in equities. European bourses have added more than 2% thus far while the US futures market is pointing to gains of about 1% currently. US Treasuries sold off a touch with the 10-year yield jumping 6 basis points to 2.91% as comments from China that they are concerned about their US investments continue to weigh bonds. Gold has bucked the risk taking trend once again and is unchanged near the 925 level.

The price action in FX was rather lackluster overall. EUR/USD remained choppy and traded up a modest 10 pips into the 1.2880/90 area. The overall bias remains higher and we would look for good support on a correction into the 1.2820 zone. Trendline resistance lurks by 1.2980/90 as well. The yen crosses were bid on the rally in stocks and USD/JPY popped 40 pips to 98.20/30 while EUR/JPY was about 60 points higher near 126.60/70. Cable was the major mover. GBP/USD jumped 150 points to 1.4030 as the break above 1.2950 elicited a nice move higher. Ostensibly there is some decent selling interest into the 1.4100 zone and we would expect a good barrier here.

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  • 3/13 12:30 GMT CA Int'l Merchandise Trade JAN -0.5B -1.0B

  • 3/13 12:30 GMT US Trade Balance JAN -$39.9B -$38.0B

  • 3/13 12:30 GMT US Import Price Index (MoM) FEB -1.10% -0.70%

  • 3/13 12:30 GMT US Import Price Index (YoY) FEB -12.50% -13.50%

  • 3/13 14:00 GMT US U. of Michigan Confidence MAR P 56.3 55.0