Commodity currencies extend recent rally on better than expected employment data from Australia and New Zealand as well as strong rally in Asian stocks. In Australia, unemployment rate unexpectedly dropped to 5.4% in April (consensus: 5.9%, March: 5.7%). 27.3K jobs were added during the month following a 37.2K contraction in March. New Zealand's unemployment rate rose to the 5th consecutive month to a 6-year high at 5% in 1Q09, compared with consensus of 5.3% and 4.7% in the previous quarter while the number of jobs reduced -1.1% during 1Q09 after gaining +0.9% a quarter ago. Japanese Nikkei closed at 9385, up 408 pts or 4.55%.

All eyes will now turn to ECB rate decision and press conference today. ECB will likely slash its main refinancing rate by 25 bps to 1%. Emphasis has been put on the potential non-standard measures to be employed by ECB and these will likely be extension of refinancing maturity to 12 months from 6 months and enhancement of loan collaterals. BoE is expected to keep interest rate unchanged at 0.5% and continue working on the asset purchase program announced before.

Another major focus today will be Fed's announcement of announce result on bank stress test. Treasury Secretary Timothy Geithner stated earlier that while some banks will need to raise more capital, 'none of those 19 banks are at risk for insolvency' and 'the results will be, on balance, reassuring'. New said that Bank of America, Citigroup, Wells Fargo and GMAC are among the firms needing to raise capitals.

On the data front, in Germany, decline in factory orders should have moderated to -0.8% mom in March after -3.5% in February. On yearly basis, the drop of -35.8% would also be less than -38.2% in the previous month. Switzerland's CPI probably contracted -0.6% yoy in April (March: -0.4%), signaling strong deflationary risk in the nation. On monthly basis, the reading is expected to have gained +0.6% after falling -0.3% a month ago as the SNB's intervention measures might have shown some impacts.

In the US, non-farm productivity probably increased +0.9% in 1Q09 after sliding -0.4% a quarter ago while rise unit labor cost should have eased to +2.5% in 1Q09 from +5.7% in 4Q08. Initial jobless claims possibly increased to 653K, bring the 4-week average to 631K, for the week ended May 2.

EUR/GBP Daily Outlook

EUR/GBP's break of 0.8785 support confirms that recent fall from 0.9494 has resumed and at this point, intraday bias remains on the downside as long as 0.8874 minor resistance holds. Further decline should be seen towards 0.8635 low first. On the upside, above 0.8874 will turn intraday outlook neutral. But another fall is still in favor as long as recovery is limited below 0.9080 resistance.

In the bigger picture, there is no change in the view that consolidation from 0.9799 is still in progress. The break of 0.8785 support favors the case that it's developing into a three wave pattern with fall from 0.9494 as the third wave. Below 0.8635 low will confirm and target 100% projection of 0.9799 to 0.8635 from 0.9494 at 0.8330. Nevertheless, downside should be contained be 0.8186/8234 key cluster support zone holds (38.2% retracement of 0.5680 to 0.9799 at 0.8223) holds, at lease initially. On the upside, above 0.9080 will argue that fall from 0.9494 has completed and turn short term outlook bullish for retesting trend line resistance at 0.9294.

EUR/GBP