Stoxx 600

Moments ago, during his testimony before the European Parliament Mario Draghi made two very bold statements:

• DRAGHI SAYS HALF OF EURO-AREA RECOVERY DUE TO ECB POLICY
• DRAGHI: QE IS WORKING

Well, until recently Draghi could point to the DAX or the Stoxx 600 and make that allegation; however following the recently collapse in European stocks he no longer can. So he is forced to revert to the one chart that actually does show whether the ECB's QE is boosting the all important lending channel.

Bad news is once again good news... for stocks that is. 

After a month and a half of markets unable to decide if they should buy or sell on ugly data, over the weekend, People’s Bank of China Governor Zhou Xiaochuan expressed faith in the economy, and said there is no basis for further Yuan devaluation, something the PBOC has said consistently over the past year, despite two sharp devaluation episodes.

There was some hope in early Japanese trading that after a seemingly endless rout in the USDJPY, which has seen the Yen surge the most in the past two weeks since the 1998 Asian crisis, the BOJ would intervene, if not via policy where it has botched things up beyond repair then directly by selling Yen on the tape: the reason for this is not only yesterday's direct intervention that sent the USDJPY soaring by over 150 pips briefly, but also after a report that Finance Ministry’s FX chief Masatsugu Asakawa met deputy chief cabinet secretary to discuss market issues; this was followed by a mee

Yesterday morning, when musing on the day's key event namely Yellen's congressional testimony, we dismissed the most recent bout of European bank euphoria which we said "will be brief if not validated by concrete actions, because while central banks have the luxury of jawboning, commercial banks are actually burning through funds - rapidly at that - and don't have the luxury of hoping for the best while doing nothing." This morning DB has wiped out all of yesterday's gain.

While algos patiently await the only thing that matters for US stocks today which is Janet Yellen's testimony before Congress. expected to be released at 8:30 am (and previewed here), the rest of the world this morning is a hot mess of schizophrenic highs and lows.