Unless there is a stimulus package which will bail their free-spending back-sides out. A huge percentage of the stimulus bill in Congress is block grants to the states to keep them from laying off workers. with Uncle Same bailing out their mistakes, it will create the same sort of moral hazard that economists worry about for Wall Street. In Bailout Nation, Uncle Sam cleans up all the problems, so there is no need for prudent management.
EUR/JPY has lost its link with equities this afternoon. The S&P is up 2% but EUR/JPY is 160 pips below session highs. Looks like some calls were made to Tokyo, waking up a few corporate treasurers. They’ve taken advantage of the USD/JPY and EUR/JPY rally to do some hedging.
117.05 is support on pullbacks on the cross while 91.30 is support for the dollar.
