Asian equities were mixed overnight. The whole week so far has been mostly a wait and see...everyone on the sidelines waiting for the big risk events. Just to note, yesterday's headline ISM disappointed, but the employment component jumped significantly. This points to upside risks for the forthcoming payrolls data. However the key component will still be Average Earnings. We will need a significant surprize there, to get a fresh USD rally I think. The market has discounted more or less all other scenarios and the "feeling" I'm getting is that a USD shakeout is near.
The Aud got another burst of life after the release of third quarter GDP, but there was no followthrough. There may be some space intraday for longs but a drop on better news means weakness, not strength.
Looking forward: this morning we have the UK Construction PMI (expected to rise slightly), EU preliminary CPI for November (Expected to remain at least stable, so not strong enoguh to fight Draghi's pessimism), ADP empolyment data, the Bank of Canada's decision (expectations are for no change to the neutral/dovish tone), and finally Yellen's speech to the Economic Club of Washington at 17:25 GMT, where market participants will be watching for renewed hawkish remarks.
Charts for Today:
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