On this final day of April a surge in global equity prices is set to deliver the best monthly performance for the S&P 500 index in close to a decade. At play would appear to be a bear market for pessimism, enthusiasm for a post stress test solution for the financial sector, whose ailing companies could bolster capital through switching equity classes from preferred to common and a reduction in various measures of contraction. Investors are running away with the premise that all that glitters really must be gold, but are failing to heed the words of various central bank warnings whose interpretation of events is more evenly balanced. The ongoing desire to bear risk is detracting from the appeal of the Japanese yen in early going.

In its semi-annual economic assessment the Bank of Japan noted the severity of the previous six months activity. The bank warned that the months ahead are not likely to show a major change. Any improvement in conditions would be mild. Meanwhile Governor Shirakawa added to the debate on the prevailing deflationary conditions depressing the economy, while playing down the likelihood of a deflationary spiral looking forward. The BOJ assessment showed continuing difficulties for customers wanting credit, which the bank noted to be something of a sore point.

The report coincided with the first improvement in industrial orders in six months. Industrial production for April grew at a 1.6% pace. Such has been the pace of export-led decline resulting in a rise in inventories that the simple need for new goods has been long absent. The data would appear to corroborate the inventory closeout sale evident in this week's U.S. GDP report in which inventories accounted for a 2.2% drag in the 6.1% overall contraction of economic growth. Investors' optimism after the report was predicated on the hope that signs of improving demand will lead to positive growth by the third quarter.

Dealers' net reaction to the words of BOJ Governor Japanese and the industrial output improvement on the yen put more stock on the April output data. Japanese yen crosses lost out with the dollar once again fast approaching ¥100 having risen today to ¥98.50. The euro rallied to ¥130.18 while the British pound rose to ¥145.13. The words of the Governor were relegated to those of a sour-puss.

Looking at the statement from the FOMC after yesterday's meeting, we note a similar notion that we're a long way off being back to normal. The statement noted the similar improvement in the pace of the contraction and noted that consumption remained constrained by ongoing job losses, reduced housing wealth and tight credit. We see none of these factors shifting materially in the next several months.

Eurozone unemployment rose further for the month of March. The rate surged from 8.5 to 8.9%. Meanwhile the pace of price increase across the Eurozone in April matched the record low recorded last month when prices rose at a 0.6% year-over-year pace. ECB member Weber made a similar overture to those of other central bankers when he warned against reading too much into recent positive sentiment indicators. While on the one hand the pace of decline would ameliorate on the other he predicts a recovery will not happen until 2010. Meanwhile member Stark declared his lack of envy for the zero interest rate policy of some fellow central banks operating under different circumstances. He stopped short of stating precisely how far rates could fall in the Eurozone, but noted the need to let past measured flourish first. In addition he said that the time to announce ‘non-standard' measures would be at the ECB May 7 meeting. Such measures, however, should be implemented only when monetary policy has reached its floor.

All in all, we can see a variety of central bankers raising somewhat of a red flag as investors rejoice. There seems to be a difference in interpretation of what constitutes good news and what's just less bad news. The euro has given back some of its earlier strength versus the dollar and is currently trading at around $1.3225 after an overnight burst of optimism collapsed from $1.3388.