Monday, March 15, 2010

A drop in Asian equity markets is leading to spillover selling in the U.S. markets. The followthrough to the downside overnight appears to be a continuation of the sharp break from
the high on Friday. Concerns over a credit rating cut in the U.K. and the lack of a bailout plan for Greece are two reasons for the selling pressure. This morning’s weakness will be a good test of
investor demand since they have grown accustomed to buying dips throughout the recent rally.

Trader demand for safety is helping to underpin the June Treasury Bonds. Friday’s closing price reversal bottom has not been confirmed yet, but a sharp break in the equity markets is
likely to drive up demand for safer, lower-yielding assets.

April Gold is trading higher despite the stronger Dollar. This is an indication that investors are becoming concerned about the possibility of a sharp decline in the British Pound.
The threat of a downgrade from Moody’s is pressuring the Pound and raising concerns about its ability to cover the servicing of its sovereign debt. …