Monday March 17, 2008 - 11:16:55 GMT
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FX Blog- Market Snapshot Europe Mid-Session 17 March 2008
GVI Market Snapshot- Europe Mid-Session
- The USD is heading into North American trade sharply weaker vs. the EUR. The GBP is steady from late Friday levels. The carry trade financing currencies, CHF and JPY, are up strongly.
- Dealers note today that the focus of activity since the Asian open today has been on risk aversion plays in light of the Fed and Bear Stearns (BSC) developments over the weekend. A take-over of BSC by JPM has been engineered and the Fed has taken a number of steps to insure the liquidity of the system. Key steps included providing access by primary dealers to the discount window and a -25bp cut in the discount rate to 3.25% ahead of the FOMC meeting tomorrow. Chatter is that the Fed will cut its Fed funds target by 75 to 100 bps at that meeting and reduce the discount rate again.
- There is talk that an emergency ECB meeting is underway after two prominent members suddenly cancelled appearances due to illness. Many are speculating that the central banks will be taking actions to shore up the USD to slow additional USD selling.
- The commodity currencies (AUD, CAD and NZD) are weaker vs. the USD on risk aversion plays. Gold and oil are higher on the weak USD.
- Asian bourses closed sharply lower. Key European bourses are down. U.S. stocks are currently seen opening lower later. U.S. bond prices are up sharp on a flight to safety. .
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