Risk taking continued unabated in the second day of real trading since the summer lull. US equities pushed onward and upward adding another 0.8% on the day. We remain cautiously optimistic about the recent gains, however. The only major economic release was that of the Fed's Beige Book and it came in with a dovish slant. Most districts reported flat retail sales, tight credit conditions and downward pressure on home prices while all reported weak labor markets. It is pretty tough to make a case for a robust recovery when we see headlines like those across the tapes.

The US dollar remained under pressure but was helped by a strong 10-year Treasury note auction. The paper was well received by foreigners who took about 54% of the offering. Meanwhile, the auction was oversubscribed by 2.7 times in another sign of good demand. This helped EUR/USD scurry back from a test above the 1.46 zone towards 1.4550/60 near the close. The slightly better bid tone to the buck saw gold get hammered in size. The precious metal slipped from another test above the $1000 mark to settle near $992. The daily chart is now flashing a ''tweezers-top'' candle stick pattern which suggests weakness on the horizon.

Economic data should dictate the price action in the Asia session now and we have some biggies lined up. Japan machine tool orders are expected to drop -3.5% in July and a worse number could see the yen come under pressure †in other words, higher yen crosses. The major report is Australian employment and the market is looking for a decline of -15.0K in August after a 32.2K add the previous month. Better data on this front should see AUD retest the highs near 0.8670 on the follow.

Upcoming Economic Data Releases (Asia Session) prior expected

9/9 22:45 GMT NZ  Terms of Trade Index (QoQ)  2Q  -3.00%  -3.20% 

9/9 23:01 GMT UK  NIESR GDP Estimate  AUG  -0.40%  - - 

9/9 23:50 GMT JN  Machine Orders (MoM)  JUL  9.70%  -3.10% 

9/1  1:30 GMT AU  Employment Change  AUG  32.2K  -15.0K 

9/1  1:30 GMT AU  Unemployment Rate  AUG  5.80%  5.90%