Asian markets traded sideways this morning as risk aversion returns as US consumer confidence figures. The Nikkei 225 was down -0.19% and the Hang-seng posted a -0.81% decline. The business sentiment in Japan improved from March’s reading and is expected to improve further in September. This said the Tankan failed to offer signs of a “broadening” or “self-sustained” economic recovery. The USDJPY continues to rise in stepping stone fashion, brief periods of consolidation followed by large moves. Risk averse driven moves seem to have waned on the pair (as opposed to the EURUSD dynamic).

Manufacturing numbers in China as China’s 4 trillion Yuan ($585 Bn) stimulus plan and record bank lending scheme have been hailed as a success. The world’s 3rd largest economy has posted a YTD GDP rise of 6% and the recent PMI reading of 53.2 (up from May’s 53.1 – while anything above 50 indicates expansion).

The optimism in the east is starkly contrasted by the tentative recovery efforts in the west. The U.S Confidence numbers out yesterday are testament to the fact that the V-shape recovery the “green-shoots” theory predicted is looking more and more like a pipe-dream. EURUSD dropped off it’s 1.4100 handle on the news. Tomorrow we have both the ECB rate decision and the U.S Non-farm payrolls (as Friday is a holiday – in preparation for the 4th of July festivities). We expect a big number in the wake of the GM and Chrysler massive layoffs.

G10 Advancers and Decliners vs USD

Global Indexes Current Level % Change
Nikkei 225 Index9939.93- 0.19
Hang Seng Index18378.73- 0.81
Shanghai Index3008.15+ 1.65
FTSE 100 Index4309.83+ 1.43
DAX Index4884.7+ 1.58
DJIA futures8447- 0.97
Nasdaq futures1835.39+ 0.84

World Markets Current Level % Change
Gold931.75+ 0.56
Silver13.63+ 0.19
VIX26.35+ 3.95
Crude wti70.85+ 1.37
USD Index80.061- 0.12

Todays Calender Estimates Previous Country / GMT
US Challenger Job Cuts-7.4%USD / 11:30
US ADP Employment change-394-532USD / 12:15
US ISM Manufacturing (JUN)44.042.8USD / 14:00
US Pending Home Sales0.0%6.7%USD / 14:00