• S&P 500 closes at lowest level in over a year, below 1,100
  • ISM manufacturing index rises to 51.6 in September from 50.6 in August; much better than expected
  • Board of Franco-Belgian bank Dexia forced to call emergency board meeting as pressure builds, funding dries up: French media reports asset sales weighed
  • Growth slowdown in BRICs intensify: India and Brazil especially
  • ECB bond buying falls again; EUR 3.8 bln in latest week
  • Greek finmin calls new budget goals “ambitious”
  • EU’s Juncker: No decision on Greek tranche today
  • Deal on Greek collateral for Finland near
  • Eurogroup ministers remain undecided on need to leverage EFSF
  • Germany says can’t discuss leverage until EFSF approved
  • Finance ministers approve Germany’s Asmussen for ECB
  • Brazilian FinMin: Sovereign debt crisis could worsen; Brazil prepared for chronic crisis
  • Papandreou considered resignation: FTD
  • S&P 500 falls 2.9% to 1099, lowest since September 2010
  • US 10 year note closes down 17 bp in yield at 1.749%
  • WTI falls 3.25% to $76.65; CRB falls 0.6%; gold rises $29 to $1650

Despite the quite strong ISM data (whisper numbers were well below 50…) US markets could not look paste the European three-ring circus in which Greece misses a deficit target, gets bailed out, only to miss its very next deficit target. European banks remain in the spotlight with Dexia in particularly sharp focus, looking like a second government bailout may be needed.

European leaders are having trouble agreeing on what brand of mineral water to order much less what to do about recapitalizing banks and ring-fencing Greece. Market confidence in government is nil at this stage of the crisis.

EUR/USD sliced through 1.3300 this morning and never looked back. We fell as low as 1.3182 late in the NY session. Sellers are seen on rebounds to the 1.3280 area near-term. Bids are hard to come by.

EUR/JPY fell to a 10-year low today, falling as low as 101.03. Intervention by the BOJ appears to be a fruitless option at this stage, giving specs only better levels to sell USD/JPY and EUR/JPY.

EUR/CHF fell to the 1.2120/25 region where the SNB has been a rumored buyer in recent sessions but bounces from that level are smaller and smaller. I still like the idea of buying a small 1.20 EUR put in the cross for three months, which will take you over the turn of the year.

Commodity currencies staged a fierce but ultimately short-lived rally after the firm ISM but fell to trend lows at the end of the day. AUD closes at 0..9530, USD/CAD at 1.0525.