There has been a significant improvement in risk appetite over the past 48 hours. The latest economic data has shown some signs of hope with industrial orders starting to stabilise after a period of savage de-stocking. In the current environment, markets will tend to be more forgiving of dismal economic data. The Swiss National Bank has also repeated that it will intervene again to block franc gains. The positive mood on risk may not last long, but for now Swiss franc rallies will quickly attract renewed selling pressure. GBP/CHF has the potential for further gains. EUR/CHF should also rebound quickly from any ECB-related selling pressure.

The US labour-market data remained extremely weak with the ADP data recording a record decline in employment of 742,000 for March after a revised 706,000 decline the previous month. Within the PMI data, the employment component also remained very weak at close to record lows.

The headline manufacturing PMI index, however, edged slightly higher to 36.3 for March from 35.8 previously and the orders component rose to the highest levels since October which suggests that the aggressive period of inventory adjustment may be easing which would improve the prospect of stabilisation in the economy.

The latest Bank of England credit conditions survey reported that lenders expected slightly easier credit conditions during the second quarter. There has also been speculation that G20 meeting will agree a substantial IMF bond issue which has also improved risk appetite as these issues would ease underlying market stresses. Swiss National Bank member Hildebrand stated that the national Bank would intervene again to curb franc appreciation.