Fragile Ceasefire Lifts Animal Spirits And Reverses Greenback's Gains

Summary

• The prospect that WWIII, which many feared, has eased and risk appetites have been emboldened.
• The greenback has suffered broadly. It has been sold against the G10 currencies and most EM currencies today. The sell-off has brought it within spitting distance of the lows seen earlier this month.
• The euro posted an outside up day, trading on both sides of last Friday's range and settling above its high (~$1.1545).
• Equities have rallied. Most of the large bourses in the Asia-Pacific region were up at least 1%, while Hong Kong, Taiwan, and South Korea indices rose more than 2% each.
• Europe'sSTOXX 600 is up 1.3%, which, if sustained, would be the largest gain sinceearly last month. US index futures are 0.8-1.2% better.

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Overview

It is not clear when the choreography began. US dramatic display, including dropping a dozen bunker-buster bombs on well-telegraphed nuclear enrichment sites in Iran, and reports lend credibility to speculation that the enriched uranium had previously been