US equities are a few tenths of a percent off their lows and EUR/USD has edged back above 1.2950 but both remain heavy as the floodgates begin to part in Washington, unleashing a wave of “stimulus” and bank bailouts. The market is ver skeptical, especially of the stimulus bill which comes with a big price tag but not a lot of the promised infrastructure. The S&P is now down 2.9% while bonds too give ground.
Gold is the only asset class on the plus side today, supported by fears of an inflationary rebound once all this spending works its way into the markets. It is back above $900.
Sterling remains the comeback kid, holding above 1.4300. EUR/GBP eyes uptrend support at the 0.9015 level; it trades now at session lows of 0.9055. Medium-term GBP shorts have been covering the last several sessions, since Europe officials began raising a fuss over the weak pound.
