FOREX IN REVIEW

As anticipation builds ahead of today's interest rate decisions, traders and economists alike are looking for the ECB to announce the plan that saves the Euro. This is a lot of pressure for Mario Draghi as he is expected to come forth with a plan to restore ECB credibility while bringing down borrowings costs for weaker nations. While no formal comments have been made regarding the latest plan, there is widespread speculation that it will enable the ECB to have unlimited power to monetize and sterilize sovereign debt purchases. Equity markets closed the session mixed as outperformers included the Swiss SMI, which rose 0.98%, and the German DAX which added 0.46%. The Italian MIB and FTSE 100 closed weaker, declining -0.62% and -0.25% respectively. EURUSD has ticked back up above the 1.26 handle to 1.2607.

Asian stocks are trading mostly higher in the overnight session as anticipation of a credible plan being proposed by the ECB has risk-assets garnering more attention. Australia, which recently has witnessed a mixed bag as far as data recorded a decline in the unemployment rate overnight following weaker GDP figures yesterday. Unemployment fell from 5.2% to 5.1% even as a rise was expected. The Australian ASX has jumped 0.92% while the Japanese Nikkei remains mostly unchanged, up a modest 0.06%. Conversely, Chinese data has proved anything but mixed as plunging commodity prices and enormous stockpiles imply further weakening in industrial production and exports. The Hang Seng has slid -0.17% in the meantime. AUDUSD is gaining pace to the upside, climbing 0.23% as USDJPY stays unmoved at 78.400.

U.S. equity markets closed mixed yesterday as anticipation builds into the end of the trading week. The Dow Jones outperformed peers, rising 0.09% as the S&P 500 and Nasdaq both recorded modest declines of -0.11% and -0.19% respectively. Nonfarm employment figures are due from ADP later today and the official Nonfarm Payroll data is set to be released tomorrow along with the unemployment number. ADP data is widely expected to fall month over month which could signal further weakness in the labor market and add to the case for further stimulus and easing measures. Energy and precious metals prices have continued press upwards ahead of the announcement as the implications of further inflation and uncertainty place pressure on Oil and Gold. WTI crude oil has rise 0.80% to $96.12 per barrel after a recent rout while gold is knocking on the $1700 level, presently trading at 1699.30.

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