Overall: The reason for the strong sell-off in the last 30 minutes of trading on Wall Street yesterday was made apparent a bit later when the financial press reported that President Obama said that a quick, negotiated bankruptcy is the most likely way for General Motors to restructure and that he was prepared to let Chrysler go bankrupt and be sold off piecemeal. That sent S&P futures sharply lower (off 7 points initially) and prices on the currencies towards the bottom of trader's computer screens. The trend continued until reports on U.S. pending home sales and manufacturing indicated better-than-expected results.

Signed contracts for existing homes increased by 2.1% in February (Expected 0.2%, Previous -7.7%) according to the National Association of Realtors and the ISM's index of manufacturing (Actual 36.3, Expected 35.8, Previous 35.8) implied that the steep declines in the sector were abating. Stocks basically rose right from the open and were reaching their highest levels of the day to 14:30 EDT.

The Euro (Eur/Usd) declined about 70 pips to near the 20-day simple moving average as S&P futures declined. Rising U.S. stocks could not however help the single currency in N.Y.as traders speculated that the ECB will make a 50 basis point reduction of its main policy rate to 1.00% and could also announce it will turn to purchasing corporate debt (a form of quantitative easing) as a means to provide additional liquidity into the system.

The unemployment rate in the Euro-area continues to rise. The latest release, for the month of February, shows that the unemployment rate reached 8.5%, more than was expected. The unemployment rate for the month of January was also revised higher, to 8.3%. About 13.486 million persons were unemployed in the Euro-area, up by 319K from one month earlier. The PMI release shows the euro-area manufacturing side of the economy has contracted for ten consecutive months. The release number of 33.9 is slightly smaller than analysts' expectations of 34.0.

The Pound (Gbp/Usd) tested the low of Tuesday’s trade during the Asian session as S&P futures declined. However, the pair reversed direction and recovered the lost ground during the European trading hours, and the trend continued into N.Y. as stocks advanced. The pound has risen almost 1% against the dollar in the past month after the BoE announced the unprecedented step of printing money to buy government and corporate debt as part of its quantitative easing policy.

The U.K. Manufacturing PMI unexpectedly rose in March, after posting the second weakest read in its recent history, in February. Despite the better than expected read, weaker global demand still outweighs any benefit from sterling's fall against major currencies, and domestic conditions were especially poor due to the crises affecting car making, construction and retail.

The Aussie (Aud/Usd) traded mixed during the overnight session, near the neutral pivot point (0.6885), after falling 50 pips in the early Asian session. Clear resistance was established in N.Y. at the .6959 level.

Retail sales in Australia have decreased by 2.0 percent in February which is higher than analysts’ forecasts of a -0.5 percent decrease. This is the largest decline seen in the retail sales report in the past 12 months. Over half of the Australian economy is related to consumer spending. The building approvals from Australia rose a seasonally adjusted 7.8 percent, month over month, in February. This is the first increase seen in the index since June 2008

The Cad (Usd/Cad) advanced 100 pips during the Asian session as S&P futures declined, but shed most of the gains during the European trading hours as crude declined in Globex trading. The pair reversed course in N.Y. after the weekly crude inventory report showed stockpiles built by 2.5M (Expected 3.1M, Previous 3.3M), with clear support established at 1.2620.

The Swissy (Usd/Chf) retraced a big part the declines seen in the last day of trading during the overnight session and the trend continued in N.Y. as stocks advanced. Resistance was met at 1.1506 by mid-day.

The Purchasing Managers Index shows the industrial sector contracted in Switzerland for the seventh consecutive month. The PMI number was released at 32.6, as expected. The Swiss PMI confirms that the economy is taking a similar path as the Euro-area and the U.S. economies, which are in recession. The index sits at multi-year lows, showing that inflationary pressures are almost zero.

The Yen (Usd/Yen) started the Asian session in volatile fashion, but soon lost most of its momentum as S&P futures declined. The pair was very up and down in N.Y. as it did battle near the 50% retracement of the August 15, 2008 decline.

The Tankan business confidence survey, which includes some of the largest companies in Japan, has fallen to a new low of -58. This is a sign that the country may be in for an extended recession as companies cut jobs and limit spending. Japans exports plummeted in February by 49.4 percent as consumers worldwide curb spending.