After last week's comments from the EU and ECB President Trichet were deemed to be a strike out, today when given the opportunity at bat they got a hit, but it remains to be seen if that hit will be a home run in the long term. After a weekend of deliberation, the finance ministers of the European Union in conjunction with the IMF announced an emergency package worth about 750 Billion Euros to help contain the possibility of Greek contagion. Added to the package was a pledge by the ECB to purchase government bonds in the secondary market as well as a resuscitation of dollar swap facilities between most G7 nations. The plan was looked at as a nuclear option by the markets after the EU was widely criticized for its inaction and ineptitude in addressing the issues last week.

The EUR/USD as well as risk was already on the rise prior to the Asia open in anticipation of the EU announcement of the stabilization plan, causing gap opens across the spectrum. EUR/USD opened near 1.2920, an over 60 pip run up from Friday's close, and more persuasively, EUR/JPY jumped 265 pips to open near 119.45 to begin the week. As the conditions of the plan were laid out and early skepticism was erased, risk continued higher only hesitating momentarily on the announcement of the bond purchasing aspect of the plan, but soon after, risk pushed to fresh highs as equities moved higher.

The optimistic moves put AUD/USD over 0.9040, the EUR/JPY over 120.00, the GBP/USD above 1.4900 despite continued uncertainty over the future of the UK leadership, and GBP/JPY over the 138.00 mark due to the day's news. USD/JPY remained firmly above the 92.50 mark on waves of yen selling. EU commissioner Rehn stated that We shall defend the Euro whatever it takes... and for the short term this nuclear option is working although the medium to long term remain to be seen.

Data Releases (London Session) prior expected

5/10/2010

6:00

GE

Trade Balance

MAR

12.6B

14.0B

5/10/2010

6:00

GE

Imports SA (MoM)

MAR

0.20%

0.50%

5/10/2010

6:00

GE

Current Account (EURO)

MAR

9.1B

13.5B

5/10/2010

6:00

GE

Exports SA (MoM)

MAR

5.10%

3.00%

5/10/2010

6:30

FR

Bank of France Bus. Sentiment

APR

103

104

5/10/2010

6:45

FR

Manufacturing Production (MoM)

MAR

0.40%

0.50%

5/10/2010

6:45

FR

Manufacturing Production (YoY)

MAR

4.60%

6.40%

5/10/2010

6:45

FR

Industrial Production (MoM)

MAR

0.00%

0.30%

5/10/2010

6:45

FR

Industrial Production (YoY)

MAR

3.30%

5.20%

5/10/2010

8:00

EC

EU Foreign Ministers Hold Meeting

10-May

 
 

5/10/2010

8:30

EC

Sentix Investor Confidence

MAY

2.5

-1

5/10/2010

11:00

UK

BOE Asset Purchase Target

MAY

200B

200B

5/10/2010

11:00

UK

BOE ANNOUNCES RATES

10-May

0.50%

0.50%

5/10/2010

12:15

CA

Housing Starts

APR

197.3K

200.0K