Global risk trades were on fire in London trading as speculation that IMF funding will be increased to $1 trillion has global equities ripping. European bourses are up +3% while US futures are pointing to a +2% open. The Financial Accounting Standards Board (FASB) is also set to vote on accounting rules today, including the controversial mark-to-market, and this is seeing financial shares higher. Ostensibly, bank earnings would increase by about 20% if these rules were changed. Gold was sold on risk appetites and has shed about -$13 thus far into the 914/915 area. The buck was also lower against most of the majors on the flight away from safety.
EUR/USD extended gains 65 pips into the 1.3350 area just ahead of the ECB rate decision. Back below 1.33 should see weakness accelerate here. GBP/USD also added another 120 points to 1.4670 in an hourly chart that now looks parabolic. Back under 1.46 here would be bearish for Cable. The yen crosses rocketed higher, with many breaking up from hourly pennant consolidations. USD/JPY soared 80 pips towards 99.50/60 while EUR/JPY jumped an even more impressive 160 points towards the 132.90 area.
The NY session now sees the ECB press conference with Trichet at 830am ET along with jobless at the same time. The market seems to be focused on the IMF news, however, as throwing money at the problem has become a prescription for equity rallies since the downturn began. A ruling in favor of mark-to-market by FASB coupled with worsening jobless claims out the US could see this move higher in risk dissipate, however.
Upcoming Economic Data Releases (NY Session) prior expected
* 4/2 11:45 GMT EC ECB Announces Interest Rates 2-Apr 1.50% 1.00%
* 4/2 12:30 GMT US Initial Jobless Claims 28-Mar 652K 653K
* 4/2 12:30 GMT US Continuing Claims 21-Mar 5560K - -
* 4/2 12:30 GMT EC Trichet Speaks at ECB Monthly News Conference
* 4/2 14:00 GMT US Factory Orders FEB -1.90% -0.30%
* 4/2 14:00 GMT EC Trichet Speaks at Podium Discussion in Frankfurt