US stocks rally, Dollar slides as markets turns risk on amid UK fiscal U-turn and positive US earnings

US stocks soared in Monday’s session in an epic short squeeze as markets turned risk-on after new UK Chancellor pivoted on proposed tax cuts that had roiled UK bond markets and Strong bank earnings from the US calmed recession fears.

The Dow Jones finished the session up 1.86% , with the tech and growth heavy Nasdaq outperforming, up 3.43% underlying the drastic shift in market sentiment from Fridays session.

Bolstering US stocks was an upbeat earnings report from Bank of America, where the strength of the US consumer was lauded and recession fears largely downplayed, seeing it’s stock price soar over 6% and boding well for future bank earnings to come in this earnings season.

In FX , GBP, AUD, NZD, and CAD, all saw gains in excess against their peers against the USD amid the broad risk-on sentiment, the Pound was the outperformer, following the aforementioned U-turn from the new UK Chancellor. GBPUSD printed a high of 1.1439, falling short of the October peak at 1.1495 as it approached major resistance levels and traders belief that not all of the UK’s economic risks have vanished.

AUD, NZD, and CAD all rode the risk-on sentiment and broad USD weakness, as opposed to anything currency specific. AUDUSD and NZDUSD printing highs of 0.6312 and 0.5649, respectively, while USD/CAD reached a trough of 1.3700,

US earnings will continue with Goldman Sachs (GS) and Johnson & Johnson (JNJ) reporting before the bell, while tech heavyweight Netflix (NFLX) will be reporting after US market close.