- Fed’s Fisher says bank intervention only short term.
- JP Morgan share price rallies after hours.
- Rumours persist regarding the future of AIG and Citigroup.
Much of the focus was again on the US banking market but the correlation between the carry-trade pairs and the equity market seems to be broken (as we prophecised here in recent days). Equity markets across the region fell over 2% on average yet USD/JPY rallied through presumed option protection at 94.85 and EUR/JPY broke above 121.00 and AUD/JPY above 61.00 as the short covering gathered pace. The major event risk in early European trade will be the release of the German IFO survey.
EUR/USD broke through 1.2690 and triggered stops below 1.2680 before rebounding on EUR/JPY buying, the range 1.2664-1.2734. USD/JPY saw a 94.27/95.22 range and EUR/JPY 119.34/121.11. AUD/USD .6389/.6461, cable 1.4453/1.4577 and Swissy 1.1667/1.1713.
