Ø
Ø US House approves Obama's proposed $816 bio economic stimulus package.
Ø Financial stocks rally on news that Obama is prepared to set up a so-called "bad bank" to absorb toxic investments. No details yet on how this will work but investors are relieved by the thought that the toxic debt will be removed from banks' balance sheets. Citigroup +18%, Bank of
Ø As expected Fed leaves rates at close to 0 and says it will keep rates at "exceptionally low levels" for some time.
Ø Asian stocks rallied for a third day, led by banks and commodity producers. Optimism that lower global rates and
Ø CB of New Zealand lowers rates more than expected: cutting 1.5% to a level of 3.5%. NZ$ drops to a six year low
Ø ECB's Trichet says that the next "important" meeting will be in March, suggesting that there will be now interest rate cut at the meeting next week.
Ø € weakens vs $ (1.3060) as the market does not appear to like the ECB's "wait and see policy".
Ø IMF cuts its growth forecast for the eurozone, now predicts a 2% contraction this year.
Ø Vix dips under 40, currently at 39.66. Oil price drops to $41.60. Gold slightly down @ 878.60.
Ø 10-2yr spread stable @ 137bps. Euro 5yr CMS @ 3.04
Ø European markets start the day lower: -1%
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