Stocks in Europe are firm and US futures are up, though we’ve seen how quickly they can turn to the downside. Treasury yields have backed up further which should be taken as a good sign but interbank lending has not improved. Trust remains the most is short supply despite massive government efforts from the US and across Europe to restore confidence in the banking sector. In the US, the call Missouri the “show me” state; until government funds are actually infused into the banks, investors are inclined to stay skittish.
On the currency front, EUR/USD finally filled the gap opened on Monday but was unable to extend gains beyond 1.3785. Near-term, 1.3640/1.3785 looks like it will contain price action.
