Risk was back on in NY trading as markets continue to hang on to the hope that the just proposed $1 trillion bad asset purchase plan from the US Treasury will revive the real economy. Better than expected US economic data also helped, as existing home sales jumped +5.1% in February after dropping -5.3% the prior month. The market was focused on the headline number despite the fact that inventories remain swollen and that 45% of sales came from distressed properties. Stocks in the US rallied a massive +7% and are now up +23% from the intraday lows in early March. Gold held up around the 950 mark until the latter part of the session and it ended the day -$14 lower near the 937/938 area.
The price action in FX was lackluster compared with the equity space. EUR/USD was practically unchanged near the 1.3630/40 open after reversing from the early session drop into the 1.3490/85 lows. Expect a good barrier near 1.3740 on a move higher overnight. The yen crosses were modestly bid with USD/JPY up 35 pips towards 97.10 and EUR/JPY adding about 55 points into the 132.30/40 zone. USD/CAD was punished more than -100 pips to the 1.2210/00 area as oil prices jumped more than 3% to just below $54/bbl. Look for follow-through in global stocks overnight to elicit further gains in JPY crosses.
Upcoming Economic Data Releases (Asia Session) prior expected
- 3/23 22:00 GMT US Geithner, Lagarde, Rudd Address WSJ Conference
- 3/23 22:30 GMT AU Assistant RBA Governor Lowe Gives Speech
- 3/23 23:00 GMT EC ECB's Trichet Speaks at a Conference
