The NY session once again witnessed the ''risk on'' trades rule. US equities managed to jump 2% in broad terms as financials popped 8% -- now up more than 100% since the March bottom. Ostensibly, the fact that at least some of the 19 ''stress tested'' banks will need more than $60 billion in additional capital was a good thing. Perhaps this was a buy the rumor sort of day. The official report cards are due out tomorrow and the reality check could undermine today's rally. The economic news was rosy with the ADP employment report showing only -491K jobs lost in April versus a -708K decline prior. This at least suggests that the NFP number later this Friday will be better than the consensus -610K forecast. The flight from safety was ultimately detrimental for the US dollar.

GBP/USD was one of the bigger movers, rallying more than 100 pips into the 1.5130/40 area. The pair looks better bid wile above key short-term 1.50 support. The commodity currencies also extended gains against the greenback as oil jumped to its highest level since November. AUD/USD extended about 60 pips higher towards 0.7480/85 and the 0.7500 level should continue to be good short-term resistance. Look for better Australian employment in the Asia session to elicit a try above there. Better Canadian data also helped USD/CAD dip more than -120 pips towards 1.1660/70. The Canadian Ivey jumped to 53.7 from 43.2 while building permits rocketed 23.5% in March after slipping -15.8% the prior month. The gains in EUR were limited despite the ''risk on'' trade as S&P downgraded five major German banks and put their outlook at negative to boot. EUR/USD only managed to add 20 points into 1.3335/40 while EUR/JPY was unchanged from the session open by 131.00 as well.

Upcoming Economic Data Releases (Asia Session) prior expected

  • 5/6 21:30 GMT US  Fed's Yellen Speaks Via Satellite To Australian Economists
  • 5/6 22:45 GMT NZ  Unemployment Rate  1Q  4.70%  5.30%
  • 5/6 22:45 GMT NZ  Employment Change (YoY)  1Q  0.90%  1.10%
  • 5/6 23:50 GMT JN  BOJ to Publish Minutes of April 6-7 Board Meeting
  • 5/7 1:30 GMT AU  Employment Change  APR  -34.7K  -25.0K
  • 5/7 1:30 GMT AU  Unemployment Rate  APR  5.70%  5.90%