Market Brief

The Usd was stable in the Asian session, as markets absorbed yesterday's central bank barrage. The EurUsd traded between 1.4170 and 1.4230, while the UsdJpy traded between 96.50 and 97.00. Overall, stronger equities and commodities, higher yields and weaker USD trend is intact. Following the S&P 1.14% gain, Asian regional indexes are broadly higher with the Nikkei advancing 1.02%. Commodities an energy prices continue to trade higher with Copper trading at 231.60 (retesting yearly highs), while Crude wti pierced the $69.00bll level (media is buzzing with new higher crude forecasts…but what happened to last year's call that crude would never break below $100bll?). A quick recap of yesterday's Central Bank action has the BoE, ECB and BoC all holding rate steady. The Bank of England said that it would keep asset purchase under review rather then commit to expanding. On a side note, the Sterling took a massive hit (dropping over 2 big figures) as rumors swirled that Gordon Brown/ Alistair Darling had resigned. ECB President Trichet added slightly more details on the eur60bn cover bond purchase program. While his elaboration was limited Trichet did stress the fact that an appropriate exist strategy would be put into place when the economy turns around.. The BoC noted that confidence and financial conditions had improved but warned that the rapid rise in CAD could hurt the fragile recovery. Today we are watching The head and shoulder formation (5 min chart) that is setting us up for a reversal trend to at least 1.4050 (next crucial support) and the NFP's could bring the impetus for further dollar gains.

Today's session is chocked full of critical economic news and events in Europe and the US. The political situation in the UK haunts the Sterling, as witnessed by yesterday's Gbp collapse. Speculation is escalating that as more important allies are forced to leave the Cabinet, PM Brown will be pressured to resign. In the US session NFP will dominate. The report is expected to show another steep decline in payrolls and rise in the unemployment rate. The NFP forecast for today is in at -521K from last month's -539K. ADP Employment data on Wednesday (-532K vs. -525K cons) and yesterday's initial jobless claims (621K vs. 620K cons) were tentative signs of increasing stability in the jobless markets. However, have we digested all the jobs fallout from the GM and Chrysler debacle?? The Usd will likely to rally broadly (JPY exception) should the payroll number disappoint and vise versa

Global Indexes Current Level % Change
Nikkei 225 Index9,768.01+ 1.02
Hang Seng Index18,679.53+ 0.95
Shanghai Index2,753.89- 0.48
FTSE 100 Index4,437.52+ 1.15
DAX Index5,067.71+ 0.05
SMI Index5,433.64+ 0.21
DJIA futures8,759.00+ 0.33

World Markets Current Level % Change
Gold977.93- 0.23
Silver15.74- 0.97
VIX30.18- 2.70
Crude wti68.76- 0.07
USD Index781.76- 0.30

Todays Calender Estimates Previous Country / GMT
ECB President Trichet speaks----EUR / 07.50
Manufacturing production, % m/m Apr-0.5-0.6NOR / 08.00
Producer input prices, % m/m (y/y) May0.7 (-8.3)-1.0, -5.0GBP / 8.30
Producer core output prices, % m/m (y/y) May--0.4 (2.4)GBP / 8.30
Producer output prices, % m/m (y/y) May0.4 (-0.4)0.6 (1.2)GBP / 8.30
Unemployment rate, % May8.38.0CAD / 11.00
Net change in employment, thous May-42.535.9CAD / 11.00
Change in non-farm payrolls, thous May-550-539USD / 12.30
Unemployment rate, % May9.28.9USD / 12.30
Average hourly earnings, % m/m (y/y) May0.2 (3.1)0.1 (3.2)USD / 12.30