8 Post No. Stock Markets Recover, but Money Markets Remain Stressed on Failed Bailout, Euro Falls

Equity markets got off to a strong start to start the day’s trade, with the US Dow Jones Industrials Average up over 200 points soon after the New York Stock Exchange open. Yet it remains clear that markets remain stressed as of late, with the US House of Representatives rejection of the Treasury bailout bill forcing deterioration in global credit markets. We see that overnight US dollar borrowing rates climbed to their highest levels in over seven years—emphasizing banks’ unwillingness to lend to one another. Such developments likewise make it expensive for forex traders to sell US dollars, and forex rollover rates remain far from normal through the day’s trade.