May 27, 2010
Rebound in Euro Helps Boost Risky Asset Demand
Easing tensions in the Euro Zone are helping to boost demand for higher risk assets. Since last week, the Euro has been trying to form a bottom but has been met by both
fundamental and technical obstacles in the process. On Wednesday, rumors that China was re-evaluating its Euro-denominated bond portfolio sent the single-currency lower along with crude oil and stock
indices. Overnight trading was another story, however.
Last night China’s foreign exchange reserves manager denied a news report that it was considering the sale of some of its holdings of Euro-denominated bonds. This helped
the Euro rebound, sending the Dollar lower against most currency-linked commodities. With the Dollar trading lower, demand for higher risk assets rose.
U.S. stock indices are trading sharply higher this morning after regaining all of its loss from Wednesday. Earlier in the week, a closing price reversal bottom was formed
in the June E-mini S&P 500 at 1036.75. This reversal bottom was confirmed on Wednesday but the …
