The collapse in risk sentiment over the past 24 hours has been triggered by seemingly innocuous events, with most news agencies pointing to concerns of sovereign debt woes in Spain and Portugal adding to the well-publicized situation in Greece. Others have also highlighted yesterday's disappointingly high US claims figures which have certainly knocked optimism for today's non-farm payrolls. But what is confounding is the aggression of the move given the weak causes attributed to the move; the contagion effect of fiscal woes across Europe has been discussed for weeks, and rarely has the market taken claims data in such regard with the prospect of the arguably more significant non-farm payrolls due the following day. Instead, this dramatic collapse in equity markets (major indices universally down around 2-5%), the plunge in commodities (crude down over 5% yesterday) and the vicious rout of risk assets across the board smacks of an over exuberant market all taking the same side of the global recovery trade and all exiting at the same time.   What is clear, is that the markets are now hanging on for one last possibility of redemption; non-farm payrolls. The number due at 13:30 GMT has the potential to reinvigorate some semblance of belief in the US economy, or conversely to derails hopes that the recovery is underway. For the risk assets hardest hit yesterday, the technical picture certainly looks grim. But the last nail in the coffin of this phase of the recovery would be the realization that US unemployment is not falling. And unemployed people do not spend, meaning that we may be heading back towards the second dip of a W-shaped recession. This payrolls needs to be positive, or we can expect a lot more pain in the financial markets to come.