Mid week retracement

Looks like we had a little bit of a retracement yesterday. Markets in general were in a bid tone yesterday, as US and European equity markets rallied quite a bit.

US data came in fairly good yesterday, with the US ADP estimate being slightly stronger at +93K and ISM manufacturing coming in at 56.6. The Beige book sounded more positive as well.

USDJPY surge up to 84.40 can be attributed to the US yields.

Euro jumped up on headlines about US willingness to back Europe via IMF funds. This shortly came down as a spokesperson from the US treasury department stated that there have not been any discussions on extra commitment of funds for the European stabilization fund.

Sterling was lifted by broad wave of risk assets recovery. Also the UK PMI came in at 58 which is the highest reading since 1994.

Aussie took another blow as retail sales came out worse than expected this morning at -1.1%.

Looks like there was a lot of data that kind of brought out a strong bid sentiment yesterday. However I still think the trend is still towards the downside due to some problems in the Eurozone, and also this morning reports of North Korea possibly attacking South Korea.

I would look at this rally as a possible opportunity to sell at a higher level.

Data Today

UK PMI construction – 9.30am GMT

Eurozone GDP – 10am GMT

Eurozone PPI – 10am GMT

ECB rate decision – 1.30pm GMT

US initial jobless claims – 1.30pm GMT

US pending home sales – 3pm GMT