Markets remain very orderly and calm despite the euro breaking lower into ground not seen in over two months. Selling of EUR/USD at the 16:00 GMT fixing has left New York traders nursing a mild hangover of euros that they are trying to sell into blips higher. Bids are scattered down the 1.2545/50 level below which stop-loss sell orders predominate. It trades at 1.2575 presently.
Looking ahead, today’s close on Wall Street will be quite important. A close below the 800 level on the S&P 500 will be a distinct negative technically for equities going forward, suggesting another 50 points or so to the downside, at least.
Early during the Asian session, the “viability plans” of GM and Chrysler are due on Washington. The Obama administration will be put into the uncomfortable position of pushing the automakers into bankruptcy or bailing them out with billions more in taxpayers money. Neither is a particularly palatable option, but most expect the government spigot to stay open.
