The immediate danger of another big credit crunch has been alleviated overnight by the combined central bank action and this caused heavy short-covering in European banking stocks and also a big rally in all ‘risk-on’ trades. The 50bps drop in the Chinese RRR went almost unnoticed in comparison.
EUR shorts were forced to cover and there may be more to come, so care is warranted. The AUD was heavily in demand and it was the best-performed of the G10 currencies through the night.
Good luck today.
