We maybe premature in our observation when we say this but here goes. The euro rallied sharply against the dollar as the investors sighed a breath of relief that the 22-member governing council remained united in their actions beyond monetary policy. An expected 25 basis point cut in rates leaves the ECB's benchmark at 1%, while it also offered to buy up to €60 billion worth of covered bonds issued in the Eurozone. It also extended the maturity of limitless loans to banks to 12 months. The euro chopped and changed direction but as we write has risen to $1.3435 against the dollar.

In easing monetary policy the ECB noted a worse than hoped for first quarter showing for GDP although it noted that since then, data appears to indicate a moderation of the contraction. That outlook is turning up around the world and in a sense harmed the ambitions of those members including Cypriot bank chief, Athanasios Orphanides who argues that pump-priming the Eurozone is the way to go.

Already the IMF expects 2009 to show a GDP contraction of 4.2%, which would be worse than expectations for either the U.S. or the U.K. who have already adopted aggressive measures to buy domestic corporate and government debt to stimulate lending. Using the recent amelioration in the glacial conditions covering Europe as an excuse to postpone the inevitable might turn out to be a costly measure by the ECB.

One might have expected core German bund yields to rise on the back of quantitiative easing, but they rose regardless of the ECB's obfuscation. Perhaps this was due in part to the decision by the Bank of England, which today left its benchmark interest rate alone but chose to step up its pace of gilt purchases by a further £50 billion. The need to expand might be less apparent in light of recent data, but it shows the understanding of the problem that the Bank of England has clearly stated before. Unlike the optimists around the world, this bank is taking a rain check on the green shoots and acknowledges the uphill struggle in resuming normal service anytime soon.

The passing of the stress test debacle has also further reduced risk aversion. The amount of additional capital totals around $65 billion and is a fraction of the overall and scary writedown figures around the world, which stretch into the trillions. The bottom line is that the Federal Reserve's earlier injection of preferred capital into most banks will likely see them through the next six months, while the task ahead for each bank will likely be one of solving the question of how to eliminate the government from its list of shareholders. Stocks around the world rose and yields increased.

So too did the value of commodity currencies. The Aussie dollar rallied overnight and stands at a seven-month high as it buys exactly 76 U.S. cents today. Data overnight showed the first decline since August in Australian joblessness icing the stress test cake. With global commodities on the rebound and easing of the challenges associated with the Mexican swine flu outbreak, investors are falling over themselves to get back into rising markets.

The Japanese yen slid sharply after an unwarranted showing of strength midweek founded on precious little. The dollar has rebounded to ¥99.20 while the euro is back to ¥133.33.