Risk has been in retreat for much of the US session and it remains so as Europe starts to wind up its trading day. The S&P 500 is down 1.1%, the JPY is strengthening and the EUR is heavily on the defensive. Commodities are sitting this one out, for a change, however.
Trichet is on the wires from Davos but has nothing new. He expects a moderate recovery and says the Stability Pact must be rigorously applied.
EUR/USD trades above New York lows, now at 1.3962. 1.3946 was the New York low via EBS.