stocks surged, boosting risk-appetite and lowering safe-haven flows to dollar;
FX markets were also buffeted by Swiss National Banks' action to lower exchange
rate of CHF, including directly intervening in currency markets. SNB's adoption
of quantitative easing had immediate and, major effect on FX markets; "with
these exceptional measures, the SNB is helping to cushion the effects of the
economic and financial crisis, with the aim of limiting the risk of deflation,"
SNB said in statement; CHF fell hard on combination of SNB policy announcement,
actual intervention in markets; SNB is 1st central bank with major currency to
intervene openly in FX markets in about 6 years. EUR scored biggest ever 1-day
gain vs CHF, while dollar also rose sharply. EUR/USD rose to 1.2936 - highest
level since Feb. 23, and against yen reached highest level since Jan. 8 of
126.40.
Late afternoon in New York, EUR/USD was 1.2924 vs 1.2854 late
Wednesday, USD/JPY 97.63 vs 97.27, EUR/JPY 126.20 from 125.10, GBP/USD 1.3955
vs 1.3884, USD/CHF 1.1844 vs 1.1522. Stocks rose for 3rd straight day as
comments from Bank of America's CEO, gains in General Electric helped; Bank of
America rose 19% after CEO Ken Lewis said bank will not need further federal
government capital, will post a profit in 2009. Citigroup +8.4%, JPMorgan Chase
+14%. GE rose 13% despite S&P downgrading credit rating 1 notch as company said
downgrade shouldn't significantly affect operations or its funding; Dow +3.5%,
Nasdaq +4%.
Treasurys rose after an especially strong reopening of 30-year
Treasurys though pared some gains due to stronger stocks; 2-year yield down
0.8% at 1.01%, 10-year down 4 bp at 2.87%. Nymex April crude rose $4.70 to
$47.03/bbl in another volatile session as market fretted over outcome of
upcoming meeting of the OPEC cartel. Comex April gold gained $13.30 to $924/oz
as buyers swooped in after SNB's action, plus on bargain hunting, short
covering and chart-based buying. (SHN)
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