• German lower house overwhelmingly passes Greek bailout but Merkel misses outright majority of her coalition
  • EFSF outlook downgraded to negative by S&P
  • Merkel: no need to boost firewall
  • ECB’s Praet sees signs of stabilization in Europe
  • Greek bank deposits continue to fall
  • ECB bought no bonds again last week
  • Nowotny: No need to re-activate bond buys
  • Nowotny: Sees mild recession
  • Spain will seek the EU’s approval to raise the deficit target
  • Greek minister resigns to run for head of PASOK
  • US pending home sales +2% vs +1% exp
  • US consumer credit -1.1% to $11.5T in Q4
  • Dallas Fed index improves to +17.8
  • Obama endorses part of Keystone pipeline
  • Group asks ISDA to rule on Greek CDS
  • JPY leads; EUR lags
  • S&P rises 0.2% to 1368
  • US 10-year note yield falls 5 bp to 1.93%
  • WTI falls $2.13 to $107.65; gold falls $5 to $1767

It was a case of whiplash in the North American session. Concerns about the European firewall dogged the euro down to 1.3366 early in the day but a reversal in risk sentiment sent it back to 1.3418 before the European close. Afterwards, it was all consolidation.

The yen reversal continued in early on, falling to 80.13 but was held up by bids down to 80.00 and rebounded to 80.52 as US yields declined.

Commodity currencies were the story. After testing the February high of 1.0050, USD/CAD turned sharply lower as the commodity currencies rallied.

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