The upward surprise to US 3Q GDP elicited a major rebound in risk appetite and a commensurate collapse in the US dollar. The headline showed a 3.5% QoQ annualized pop in growth while the market was expecting a smaller 3.2% increase. The details, however, were not as bright. The bottom line is that autos, inventories and a weak dollar (exports) helped drive GDP in the third quarter. Not exactly what you would call organic growth. Indeed, the government's cash for clunkers handout helped the auto sector contribute more than one percentage point to that headline result. Since 1985, every time autos contributed more than 1% to headline GDP we saw, on average, a negative contribution of -0.65% the following quarter. In other words, look for a big giveback from this sector in 4Q.

Equities jumped more than 2%, breaking a four-day losing streak in the process. The negative correlation between stocks and the US dollar was alive and well and the USD index shed about -0.7% on the day. EUR/USD soared from a NY open near 1.4730 towards the 1.4840 area as we write. The 100-hour sma by 1.4850 now is providing excellent short-term resistance and above opens to 1.4900 next. The yen crosses jumped as the carry trade came back to life. EUR/JPY popped from 133.70 towards 135.60 while GBP/JPY soared from 149.40 to the 151.30 area. Dollar weakness helped commodities rally as well and gold (XAU/USD) jumped nearly $18 into the $1047 area †should now find some selling interest ahead of $1050.