European equities fail to benefit from US.....>

FOREX: European equities fail to benefit from US stock rally

- Yesterday's incredibly strong US close (S&P closed higher by 4%) has failed to

filter through to European indices so far today, which are extending their

recent decline. Coronavirus concerns remain front and centre, with European

banks hit particularly hard. The Eurostoxx Bank Index is now on track to enter a

bear market having fallen over 20% from the February peak. This has proved net

positive for EUR, firming the positive correlation between EUR and risk-off.

- The decision of Japan's Seven & I to discontinue its $22bln deal for

Marathon's Speedway gas stations has had a profound impact on JPY, which

prompted USD/JPY to fall through the overnight and NY lows, helping tip JPY the

top of the G10 FX table Thursday. The cancellation of the $22bln deal is a

considerable chunk of M&A flow to discount, and may have prompted some JPY hedge

unwinds. 

- US weekly jobless claims, final January durable goods and factory orders are

the data highlights today. BoE's Haldane and Carney speak, with BoC's Poloz and

Fed's Kaplan also on the docket.