Financial markets soared on Thursday despite mixed US economic data. It's Germany Chancellor Angela Merkel's comments that lifted sentiment. Moreover, investors were also relieved for the time being after news that Spain would soon receive an installment of funds from the EFSF to help recapitalize one of its banks. Wall Street gained with the DJIA and the S&P 500 rising +0.65% and +0.71% respectively. In the commodity sector, gold jumped to a 3-day high of 1622 before settling at 1619.2, up +0.78%, as driven by re-emerged hopes of unconventional easing from the ECB. Crude oil prices also climbed higher with the front-month WTI and Brent contracts adding +1.35% and +0.56% respectively.

Germany's Chancellor Angela Merkel showed her supports to the ECB President Mario Draghi's plan to reactivate bond purchases. Merkel stated that policymakers "feel committed to do everything" they can "in order to maintain the common currency". She also affirmed that Draghi's decisions have "made it clear that the ECB is counting on political action in the form of conditionality as the precondition for a positive development of the euro". These comments indicated that Germany has moved away from the opposition position over the ECB's asset purchases. Meanwhile, Spanish bond yields slipped as the debt-ridden country will soon receive emergency funding for bailing out Bankia.

The US data released was mixed. Initial jobless claims increased +2K to 366K in the week ended August 11.Concering the housing market, housing starts slipped -8K to 746K in July while the previous month was revised lower to 754K. Housing permits added +52K to 812, the highest level in 4 years. In the manufacturing sector, the Philly Fed Index improved to -7.1 in August from -12.9 a month ago. It's hard to gauge the Fed's intention regarding monetary easing with this set of data and investors will probably need to wait for Fed Chairman Ben Bernanke's address at Jackson Hole on August 31 for more indications.

For the dataflow on Friday, Canada's headline CPI probably climbed higher to +1.6% y/y in July from +1.5% a month ago. In the US, the University of Michigan Index probably slipped to 72 in August from 72.3 in July. Leading indicators might have gained +0.2% in July following a -0.3% dip in the prior month.