Overall: The majors started rising about 30 minutes after Australia's surprise GDP contraction was announced. Chinese shares in Shanghai and Hong Kong rallied along with S&P futures, Australian, Japanese, South Korean and Singaporean stocks after China announced it was extending its stimulus program. European companies with Chinese exposure performed particularly well. The rally extended into the N.Y. cash markets even after fresh economic data showed weakness in service industries, housing and employment.

The Euro (Eur/Usd) rose fairly steadily throughout the overnight sessions on the back of renewed risk-acceptance, and the pair was still making fresh highs deep into the N.Y. session as stocks made their first gain this week. Also helping the sentiment was the announcement of the Obama administration's mortgage rescue program. N.Y. established a support base in the 1.2590 area.

The service side of the economy in the Euro-area has been in contraction for the last nine months according to the latest PMI release. The released number of 39.2 is a multi-year low, as the economy is struggling to show any signs of growth amid the global slowdown.

The Pound (Gbp/Usd) tested the low of the last day of trading in the Asian session. After the London open, the pair surged higher and the move extended through N.Y. trading as stocks made their move. Support in N.Y. seemed to be established at 1.4100. Tomorrow, the BoE is expected to reduce the overnight interest rate by 50 basis points.

The consumer confidence for the U.K. in February came in at 43 despite analysts’ forecasts for a much lower 38 reading. The index rose by two points, this is the first rise seen since October 2008. In separate components of the report, consumers are showing that they are becoming more optimistic about future economic conditions and are thinking that now is a good time to start making large purchases.

The U.K. Service PMI beat analysts’ expectations for a third consecutive month. However, the release still shows the service side of the economy has contracted for more than ten consecutive months, near the fastest pace seen in the last decade

The Aussie (Aud/Usd) plunged nearly 90 pips in the early Asian session after a very weak GDP report, but spent most of the remaining Asian and European sessions recovering the ground lost as global equity markets advanced. By the middle of the European trading hours, the aussie was again trading near the Asian session opening price and the pair extended the gains in N.Y. trading as stocks rose. Support in N.Y. was established at the .6470 handle.

In trend terms, the GDP decreased 0.1 percent and non-farm GDP decreased by 0.3 percent. However, in seasonally adjusted terms GDP dropped by 0.5 percent, which is well below expectations of a 0.2 percent increase. In seasonally adjusted terms, the largest negative contribution was from inventories, which were offset by the positive contribution from imports and private business investment. The sectors that also contributed to the decline were manufacturing (-0.5%), property and business services (-0.3%), and wholesale trade (-0.2%).

The Cad (Usd/Cad) traded in the overnight market, between the 1.2965 area, where the pair topped in the last day of trading, and the neutral pivot point (1.2910). The pair declined off the 1.2860 handle (top of 30 minute resistance) after the weekly oil inventory report showed stockpiles decreased and that demand for gasoline improved for a fourth straight week.

The Swissy (Usd/Chf) traded in large swings around TheLFB R1 (1.1810) during the European session after it advanced 40 pips during the Asian trading hours. The pair declined sharply in N.Y. as stocks advanced

The Yen (Usd/Yen) traded in a 30-pip range in the Asian session but managed to rise sharply during the European trading hours, gaining almost 100 pips and making a new high for the current uptrend. In the last four weeks of trading, the yen gained more than 1000 pips, as the pair broke free from its equity link. The pair is currently trading in a 30 minute channel between 99.12 and 99.50.