European Central Bank

From Bloomberg macro commentator Chris Anstey

Currency moves can be "brutal," as the European Central Bank well knows, since then-ECB President Jean-Claude Trichet used that memorable adjective more than a decade ago. The problem for the ECB is it may be heading down a dark alley where two well-armed peers await.

Investors have reasonable clarity about the medium-term policy outlook for the U.S. Federal Reserve and Bank of Japan, with both central banks effectively anchoring long-term rates.

A lot changed over the past 4 days, starting with Draghi's unexpectedly hawkish speech earlier this week (subsequent ECB clarification notwithstanding), followed by a barrage of hawkish Fed speakers - including Yellen - all of whom warned that risk assets are overvalued, then the heads of the BOE and BOC, who also came out surprisingly hawkish and warned rates hikes are coming, and finally the conclusion of the ECB's forum in Sintra, where the hawkishness was palpable. In short: coordinated global central bank tightening, or at least jawboning.

The euro soared to the highest level in over a year while bond yields and global shares also climbed, as an ongoing barrage of coordinated hawkish comments from central banks signaled the era of easy money might be coming to an end for more than just the United States. S&P futures were fractionally in the green following the best day for US equities in two months, as banks climbed after passing the Fed's stress tests and announcing bigger than expected shareholder payouts.

U.S. index futures point to a slightly higher open, as markets in both Europe and Asian fall.The EUR surges to one year highs as markets continue to reverberate from Draghi's hawkish comments while yields rose around the globe following similar hawkish comments from Fed speakers on Tuesday.

S&P futures point to a higher open following gains in Asian markets supported by stronger commodities but mostly European bourses, which are sharply higher following the €17 billion bailout of the two Veneto banks in Italy, the biggest taxpayer funded bank rescue in modern Italian history, as well as Dan Loeb's activist campaign of the world's biggest food company, Nestle which sent the stock up 5%, and finally Germany's Ifo business climate index which hit new all time highs.