The EUR has fallen 10% vs. the dollar in 4-month’s and is now contained in this narrow monthly range. Is this the fair value of the EUR? It’s lost 5% this year over European sovereign debt problems and the possibility that Trichet will fall behind Bernanke in hiking rates. The contagion scenario, referring to Spain and Portugal, has traders leaning left of center in their EUR positions. However, the record ‘short’ bets are in danger of feeling a ‘whiplash effect’. A natural healthy cleansing of the ‘weaker shorts’ is on the horizon.

June S&P E-mini Futures: Trading activity moves to the June contract at the pit open. Today's range estimate is 1123-1139 for the June contract. I now think a 20-25 point break has started but I expect it to be brief and end near 1120. Look fort the market to reach 1200 by the end of May.

QQQ: A rally to 50.00 is underway.

March S&P E-mini Futures: Today's range estimate is 1136-1150. I expect the market to reach 1200 over the next three months. Remember that activity will begin to move into the June contract at tomorrow's pit opening.

QQQ: A rally to 50.00 is underway.

TYX (thirty year bond yield): I think this market is headed for 5.00%.

Riskier Assets in Demand; Europe Debt Worries Remain

Investors raised their appetite for riskier assets during yesterday's trading, but still avoided European and British currencies because of debt worries. The big gainers yesterday were the AUD and CAD, both currencies are linked to commodities, in particular crude oil. Crude oil had recently gained in positive momentum, although it closed slightly lower yesterday. The question remains whether the EUR and GBP will attract some of the appetite for riskier assets.
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USD – USD Firm against EUR; Declining vs.

Few seem convinced about the Euro-zone escaping further repercussions. Even leaders and policy makers disagree on ‘the positive actions’ to be taken. Greece, technically, could be the smallest of all of the European economies problems, as other members begin to impose their own self-austerity plans. ‘Loose lips’ yesterday by the Greek’s PM has investors questioning the value of the EUR. The market needs a distraction, and seems to be shifting towards the Yuan ‘potential’ revalue.