Risk aversion is running rampant this morning as US equities come back from a holiday weekend in a very grumpy mood. S&P futures are lower by over 2% this morning. The Big 3 automakers need to prove their viability to the US government today, and the market is guessing their case is not particularly strong. Concerns continue to resonate over the impact of Eastern European loans on the balance sheets of European banks as well as the creditworthiness of individual eurozone nations like Ireland. Ireland’s sorry economy has voters rethinking their rejection of the EU Treaty.
Strong support in the 1.2700 area has given way and prices have fallen back to 1.2600 where fresh barriers are romored. Very large exotic options are rumored struck down at 1.2500, dealers say.
