ECB speculation: intervene on the currency markets and sell the euro to protect exporters for a rising currency?

·       US markets take a breather after 5 days of gains: DJIA -0.52%, S&P -0.83%, NSDQ -0.93%. Financials in the S&P drop 2.9%: an analyst at Calyon Securities advises selling bank shares.

·       IBMs purchase of Sun Microsystems could collapse: Sun shares tumble 23%

·       Q1 earnings reports kick off this week. First up is Alcoa Inc, followed by Dow Chemical.

·       Asian stocks lower: Nikkei -0.28%, Hang Seng -0.46%. Bank of Japan keeps overnight lending rate at 0.1%.

·       Oil price lower @ $51.38: declines in equity markets bring back extended recession fears and therefore lower demand for oil.

·       Gold recovers ($878) from its recent low. Price level attracts buyers.

·       Australian Central Bank cuts rates less than expected: -0.25% vs 0.5% expected. Benchmark rate is now at % (49 yr low).

·       € weaker vs $: 1.3362. Some speculation that ECB could intervene on the currency markets and sell the euro to protect exporters for a rising currency.

·       VIX back up: 40.93

·       10-2yr spread 158bps. 5yr CMS @ 2.90%, 3yr @ 2.39%

·       Europe flat this morning: US futures currently negative.

 

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