The dollar was mixed in the early part of the session despite weak economic data out of Europe. The EurUsd fell roughly 50pips through 1.32, while the UsdJpy slipped 20pips to high range of 98. The GbpUsd gained 84pips seeing resistance at 1.44, which is consistent with general moves in risk appetite. Equity markets managed to close positive Europe and performing stronger in the US, with the Dow higher by 1.98% or 149pts. Bond yields were inconsistent in the US with the 2yr rate higher by 2bps, the 10yr unchanged, and the 30yr lower by 3bps at 3.5%. Commodities were active with gold rising to $926oz, and oil slightly lower at $47bbl or 3.7%.

Eurozone unemployment surprised investors ahead of the ECB meeting tomorrow at 8.5% vs. 8.3%. The central bank is coming under considerable pressure due to the disappointing data and recent contraction in overall growth. Any commentary indicating a move towards quantitative easing will trigger a sharp sell-off in the Euro, but we are inclined to believe the ECB will resist this approach. In the US, Housing data shocked to the upside with pending home sales at 2.1% a solid increase from the previous reading of -7.7%. ISM Manufacturing increased to 36.3 vs. 36.0, this is third consecutive increase marking a possible softer recession than originally expected. The improvements in the US economy are critical to overall risk sentiment, and investors will be watching for evidence that may lift the current environment.