One of the least terrifying days in recent memory

I didn’t crawl under the desk once today…It’s a start. Stocks closed down less than 1.5% and the majors traded in pretty uneventful ranges. If this continues, liquidity should return and short-term trading opportunities will be worth the risk again. Credit markets appear to be thawing around the edges, a very positive sign for the global economy from a macro perspective and a likely dollar negative if risk-aversion recedes.

I’ll check in over the weekend to keep you apprised of the goings on at the big Bush/Sarkozy summit.

Closing levels for the big three: 1.3415, 101.45 and 136.10. Great weekend, all!

Afternoon rally fades on Wall St.; EUR/JPY fades as well

USD/JPY reached resistance at 101.80 and EUR/JPY faded at 137 and each have given back a chunk of their gains. EUR/USD is lower as well, along with the cross. We’re getting close to that fateful final trading hour of the week, which has been son volatile of late. An options expiry at today’s close will only add to the swings. Unless Stocks break much, much higher over this last hour (they are now up 50 Dow points) we’d doubt no ranges will be seen today.

New feature!

Here at FX Briefs we’re all about innovation. Our team of dedicated product specialists toil endlessly to bring you the very best in silly You Tube clips and incendiary British newspaper columns. Today we’ve added a new feature called Forex Jargon. It is on the navigation tab at the top of the page. We’ve defined some of the terms we use a lot in our commentary. If you have suggestions for more, drop me a line at jamie at fxbriefs.com.

Fed’s Evans: Economy sluggish into 2009, inflation receding

Chicago Fed president Evans is on the wires sound fairly dovish. He sees the economy staying fairly sluggish “well into” 2009. Forward looking assessments would put less weight on inflation now, he says.

Stocks continue their moderate Friday afternoon recovery, up about 2.5%. EUR/JPY is well underpinned as a result, now at 137.00.

USD/JPY eying resistance in 101.75/85/95 region

USD/JPY has resistance in the 101.75/85/95 region, so let’s say it has to clear 102.00 to excite the markets much. Stocks are enjoying a midday rally, up nearly 2%. EUR/JPY resistance begins around 137.20 and extends toward 137.45, a similar set up to USD/JPY. If stocks keep motoring, USD/JPY and EUR/JPY likely will too. Real sellers are not seen until 103.00 in USD/JPY and above 140 in EUR/JPY.

What’d we miss?

We lost internet connectivity here in suburban Boston. Judging by my inability to get through to Comcast, we were not alone. Looks as though we didn’t miss much as markets continue to waffle. There is an options expiry in equities today, so the last hour could be more volatile than usual (shudder…).

ING statement helps support EUR in range

Dutch bank and insurance company ING shares were under intense pressure earlier in the day, prompting fears that they were the next shoe to drop. The bank put out a statement saying their capital is strong, yada, yada, helping stabilize their shares. this also helped underpin the euro to an extent. the single currency had already gotten a bounce from talk that credit conditions are beginning to ease in the interbank markets.

Resistance remains intact in the 1.3515/35 region while bids remain at 1.3400 and below. Range-bound markets should lower volatility and improve liquidity, helping ease trading conditions for the short-term speculator.

Pressure building on banks to lend

Dealers say the Feds have begun to phone around to the banks that have taken capital from the government with a clear message: Start lending, Boys. The shortest end of the yield curve is beginning to thaw with funding reportedly ample in the one-month maturity. It’s a start, and if it moves further out the curve, it will go a long way toward soothing rattled equity markets. This would likely translate into firmer commodity currencies and less demand for JPY. EUR/USD would likely be dragged up as well.

Unions not so aggressive now. Wonder why?

German labor union Verdi says it is “not so dogmatic” now on getting an 8% pay raise for bank workers. Hmm, I wonder what could have happen to have them change their tune? Strikes set for November are now off the table, the union head says. Reality bites.

EUR/JPY is rebounding as US equities recoup their early losses. Asian buying of EUR/USD on dips is helping support the market as well. Resistance is eyed between 1.3515 and 1.3535 in EUR/USD and is heavy above 137 in EUR/JPY.

On the economic front, University of Michigan consumer sentiment was frightful at 57.5.

Asian central bank bids help underpin EUR/USD

Dealers note consistent buying in EUR/USD on dips from a smaller Far Eastern central bank. The market seems in no mood to go anywhere fast but the bid could be filled in if stocks open weak on Wall Street, which futures indicate they will. It trades quietly mow at 1.3425.