The Usd was stronger in the Asian session, as the rise in US unemployment reported on Friday is weighing on the investor's sentiment. The EurUsd slipped from 1.3478 to 1.3373, while the UsdJpy was range bound between 90.35 and 89.93 (the Japanese holiday today has made for trading quiet). As to be expected, the current risk appetite indicator, AudJpy, trended lower from 63.51 to 62.34. Friday's weak non-farm payrolls triggered a renewed bout of risk aversion, with the S&P down 2% and US 2yrs yield lower by 8bps. Currently, Asia 's regional indexes are trading lower and European futures are pointing to a soft opening. Crude is now trading below the $40bll handle, as fears of the global slowdown take on new momentum. We are expecting the Usd, Jpy, Chf to stay supported this week, as risk aversion and ECB rate decision take center stage.

For this week, the focus will be on Europe with the ECB Thursday rate announcement. Markets are expecting the ECB to cut rates by 50bp this week. However, last week's media reports have suggested that the ECB might hold rates. In the face of rapidly deteriorating economic conditions, we doubt the ECB members resolve to stay at 2.50%