[LFX]

1) The risk sentiment has reversed. We had such a great run in equity markets they were bound to turn around on one piece of news or another. The catalyst today was the US auto sector coming back to the forefront of the news. Obama is not pleased with the lack of restructuring taking place at GM and Chrysler and has raised the possibility of a controlled bankruptcy, which many fear could lead to a collapse of an entire domestic industry. This news on top of yet another bank failure in Europe (this time in Spain) has spooked the market.

2) The good old correlation of weak equity markets leading to US dollar strength is in full force today. When USDCAD failed to sustain a break below 1.22, it was just a matter of time before the market found a reason to take it higher again. At the end of the day, we're stuck in a 1.1850 - 1.31 range. Each time we fail to sustain a move outside of this range the market finds a reason to take it in the other direction.