• Extreme volatility and an S&P 500 rally followed the announcement of ECB rate hikes and a new LTRO
• A lasting Euro and risk bull trend are improbable given the backdrop for fundamentals and positioning
• With a low-volume and low-volatility risk run, Friday's NFPs presents an acute threat
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Why would the Euro rally after the ECB announces fresh monetary easing? Is a new wave of stimulus feeding the next leg of the global risk run? These are the two most prominent questions investors have following the market's reaction to the latest round of 'stimulus' from a major central bank. For the currency at the center of the conversation, escalating a policy of accommodation means more to return for a market desperate for yield than it does in quieting Eurozone stability fears - like the 'whatever is necessary' vow Draghi made in July of 2012. On the risk front, optimism was uneven across markets and the benchmark S&P 500 was still sporting anemic participation. The short-term response to high-level event risk may belie underlying problems - something that could possibly be exposed quickly on the release another volatility inducing event: NFPs. We discuss the shorter and longer-term market outlook in today's Trading Video.