Global equities were pummelled overnight as fears of sovereign debt woes in Europe coupled with disappointing weekly jobless claims had investors on edge ahead of tonight's nonfarm payroll data. US Initial Jobless claims for the week of Jan 30 rose to 480,000 which were higher than the estimated 461,000. Continuing claims for the week of Jan 23 also came in a touch higher - leaving investors in a panic ahead of tonight's US Non-Farm payrolls which is expected to show 10,000 newly created jobs in January.

True to form, as equity markets got hammered, commodity markets followed suit resulting in usual flock to the perceived safety of the low yielding heavy weights, the Greenback and Yen. The US dollar index which measures the dollar's value relative to six major foreign currencies is currently trading .76 per cent higher at 79.97.

As expected, the Bank of England kept its benchmark interest rate at a record low of 0.5 per cent overnight and halted the quantitative easing program in which majority of the GBP 200 billion has been exhausted.

The European Central Bank also left benchmark interest rates unchanged at 1 per cent. In a speech the ECB Governor Jean Claude Trichet indicated economic activity in the Euro-zone remains moderate and will continue on a similar line in 2010, given unemployment woes likely to dampen economic growth. Trichet also affirmed that Europe has taken a step in right direction when asked about Greece's economic struggle. To add to the equation concerns have mounted Spain and Portugal will be the next casualties as they struggle to curb their budget deficit.

Locally, the latest bout of risk aversion meant only one direction for the higher yielding Aussie. The local unit dropped over 2 big figures to lows of 86 US Cents coinciding with a retreat of Gold which fells to lows of US1060 a troy ounce. At the time of writing the Aussie dollar is buying 86.6 US Cents and has made some consistent positive ground over the last hour - however movements in domestic trade with be contingent to the RBA Monetary Policy Statement due for release at 11:30 AEDT