Stock markets around the world opened up strong and held on Monday, following a rush of news announcements over the weekend by central bankers and government finance ministers seeking to calm and reassure the global investment community and the public that they will do whatever they can to shore up banks, revive the flow of credit and protect depositors.

Rebounds in European and US equity markets followed on the heels of a rebound in Asian markets after central bankers and government finance officials made strong, reassuring statements following weekend meetings in Washington D.C. and Paris.

While governments' emergency relief measures have become crucial, don't believe for a second that we can put the financial system and credit crises behind us. While some of these efforts appear well-conceived and directed, others will prove not to be.

Today, after a bullish burst of early trading the markets faltered, with profit-taking and some normal congestion setting in after such a big run-up.

Currency Thoughts:

The devaluation of the U.S. dollar is one of the factors helping our current currency position in the G3 Global Investor portfolio. And it's also one of the reasons why I'm always watching for a good entry point in some other currencies. Some worth a look include the Aussie dollar, Euro currency, Canadian dollar and the Mexican peso.

Looking south of the US border at a currency not normally talked about actively in currency circles, the Mexican banking system is reportedly sound and the money markets functioning relatively well, even in the face of US and European bank subsidiaries drawing in their horns and money market investors in general more wary.

The big international banks are cutting back their credit lines and closing out positions, which have led to big drops in the Mexican peso, to the extent that the Mexican central bank took the rare step of intervening in the forex market to defend the currency and set up a dollar purchase program. That's reassuring and should calm those with funds in the Mexican money market.

On top of earning higher interest rate returns in the MXP money market is the fairly good prospect of the peso appreciating against the US dollar over the next three to six months and longer term.

Jeff Manera, Editor
G3 Global Options
G3 Global Investor
Emerging Markets Insider
Email: Jmanera@EmergingMarketsInsider.net