Archived IMT (2008.10.20)

Risk appetite extends higher as credit markets are propped by a decline in the 3-month USD LIBOR fixing to 4.06% from Fridays 4.42% and a decline in the overnight LIBOR fixing to 1.51% from 1.67%. The TED spread (Eurodollar futures minus T-bill) to 327 bps from 399 bps. Dow futures are up 172 pts, compared to 270 pts up earlier. Market conditions are clearly superior to Fridays as far as risk appetite and volatility, but credit spreads and equity futures are off their best levels of the day. Yen currency crosses continue to closely mimic the aforementioned gauges of credit and equity market confidence, with rising currency rates (falling yen) reflecting improved risk appetite and falling rate (rising yen) indicating reduced appetite or more fear.This mornings 10 am testimony by Fed Chairman Bernanke is expected to preserve the downcast tone of his recent regarding speecches about the medium term outlook of the economy.