Short and Sweet

Equities are somewhat rudderless again today as they see-saw from red to blue ahead of the ECB refi and Fed decision. The Euro which confounded (certainly my) expectations and rallied strongly yesterday has stalled today and with GBP’s rally, EURGBP is taking a bit of a dirtnap. The greenback continues to fade with the commodity currencies in particular posting strong gains again today.

The Japanese trade data overnight was poor and as Brad Setser asks today, given the Chinese expansion over the last year, why hasn’t this fed through to the rest of the world? Japanese exports to China are down 29.7% vs -25.9% in April. Still this is better than exports to the US and Europe; overall, exports were down 40.9% vs 39.1% in April. Oh, US and Euro exports to China are down too…but still, China’s going to lead us out of this.

Ah, the results of the ECB refi have just been released with the number coming in at EUR442.24bl, estimates were c300m so I would expect to see Euro pressure. Some are saying this is positive for risk appetite, frankly it just seems like another buying time exercise to me so I’m sceptical as to whether we’ll see the market take too much notice.