June 10, 2010
Equity Markets Recovering after Euro Gains give Risk Demand a Boost
A stronger Euro overnight is helping to drive up demand for risky assets, sending U.S. equity markets higher before the opening. The ability to regain the psychological
1.20 price level triggered short-covering rallies in the global equity market, leading to the call for higher openings in New York this morning.
The E-mini S&P 500 plunged from its high late in the session on Wednesday after testing a short-term retracement level at 1074.50. Increased demand for higher risk
assets helped drive up the equity markets early, but comments from Fed Chairman Bernanke and less than stellar economic data from the Fed’s Beige Book encouraged investors to take profits, driving
the index lower into the close.
Despite the early strength in the indices throughout the first half of the session, traders remained cautious about the move, watching the Euro for direction. Once the
Euro broke through the psychological 1.20 price level, traders turned bearish, accelerating the break to the downside.
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