The NY session brought about another rollercoaster in stocks but the overall flavor was for heightened risk appetite. US stocks have now rallied in eight of the last 10 days in broad terms, for a net gain of nearly 4% in that span. The oscillations elicited similar price action in the yen crosses. EUR/JPY jumped towards the 124 area after opening the session about 100 points below there - closing near the 123.50/60 zone. Meanwhile, USD/JPY rallied from 90.40 to session highs just above the 90.80 area (where the Japanese export community was ostensibly selling the pair), only to close back near the 90.50 mark.

One of the biggest movers in the session was gold (XAU/USD) as the precious metal absolutely collapsed from session highs above $1125 to lows near the $1104 area. The bottom of the Ichimoku cloud rests at $1108.79 and the close below (albeit by a hair!) signals more short-term weakness is potentially in the offing. The rumor mill was churning in typical fashion as the precious metal faltered. Ostensibly, central banks were the culprits behind the spill. We would think that the recent news that China did not confirm it is buying the IMF's remaining gold offering and that they remain buyers of Treasuries has shifted the focus away from gold as the ultimate safe haven asset.

The latter part of the session provided some fireworks as the RBNZ left interest rates on hold at the 2.5% target. This was as expected and the bank reiterated that they are looking to begin tightening policy sometime in the middle of 2010. The overall tone in terms of the economic outlook was a touch weaker than perhaps what the consensus was looking for, however. The headline that caught traders' attention was that the RBNZ will probably not tighten policy as much as in prior cycles. This elicited a rally in Kiwi bonds (lower rates) and thus a squeeze lower in NZD/USD on the follow. Important support now lurks near 0.7000/0.6970 where we expect short-term buyers to be lurking. Should get interesting overnight.