The Euro trade very calm, above 1.29 level after yesterdays

Good Morning,

- The Euro trade very calm, above 1.29 level after yesterdays huge sell off….waiting know the US payrolls data later in the day.

- Asian shares: Japan's Nikkei -0.05%, Hong Kong's Hang Seng -0.16% (07:00 GMT), Korea's Kospi -0.33%, Australia's ASX 200 -0.58% and China's Shanghai 0.86%.

- The euro drop more than 200 points on Thursday and lost the 1.30 level very easy, after the ECB unexpectedly cut its ultra-low interest rates even further and said it would start buying loans and bonds next month to prop up the continent's struggling economy.

- The euro hit a 14-month low against the dollar at $1.2921, breaking below the key technical and psychological resistance point of $1.30.

- The ECB cut its main refinancing rate to 0.05 percent from 0.15 percent previously and drove the overnight deposit rate deeper into negative territory, to -0.20 percent.

- Mario Draghi signaled at least 700 billion euros ($906 billion) of fresh aid for his moribund economy and left a fight with Germany over sovereign-bond purchases for another day. Pledging to “significantly steer” the European Central Bank’s balance sheet back toward the 2.7 trillion euros of early 2012 from 2 trillion euros now, the ECB president announced a final round of interest-rate cuts and a plan to buy privately owned securities.

- The dollar index touched a 2014 high of 83.865, with the biggest percentage gain since July 5, 2013.

- Nomura on EUR/USD: The pair saw an aggressive sell-off on thursday after the ECB's surprise move of cutting rates, In response to that, Nomura makes an unusual forecast adjustment, focusing on the short-term direction for EURUSD (rather than the medium-term). Nomura's new forecasts put EUR/USD at 1.27 by the end of September. "We are revising our near-term EURUSD end-September forecast to 1.27 and projecting more stability in Q4. In 2015, we expect the downtrend in EURUSD to resume as monetary policy continues to diverge between the ECB and the Fed. In particular, the debate should shift away from the timing of Fed hikes to a debate about the pace of Fed tightening in 2015, and eventually the terminal rate. Meanwhile, Eurozone interest rates are set to remain anchored at very low levels well into the future," Nomura projects. "As such, significant monetary policy divergence should be an ongoing theme. Hence, a target of 1.20 for EURUSD is realistic by mid-2015, assuming that the flows into Eurozone risk assets remain more normal (as opposed to the outsized inflows seen from mid-2013 to June 2014)," Nomura adds.

- Fed’s Powell: Labor market has improved substantially, hard to argue economy is getting tight, not a lot of pressure in the economy. Federal Reserve communications committee is ‘just getting started“. Significant parts’ of FOMC statement need to change. “I just don’t see it’ on inflation coming, Fed defending 2% target from below, not above.

- The U.S. trade deficit narrowed in July to its lowest point in six months as exports rose to a record high, supporting views of sturdy economic growth in the third quarter. The trade gap fell 0.6 percent to $40.5 billion, the lowest since January, data showed on Thursday.

- EU plans to target Russian oil groups with new sanctions if no solution on Ukraine.

- BoJ Monthly Report: Japan's economy has continued to recover moderately as a trend, although the subsequent decline in demand following the front - loaded increase prior to the consumption tax hike has been observed. Overseas economies - mainly advanced economies - have been recovering, albeit with a lackluster performance still seen in part. Exports have shown some weakness . Business fixed investment has increased moderately as corporate profits have improved. Public investment has more or less leveled off at a high level.

- Watch today: German production, Ukraine case, US payrolls data.

Have a nice Weekend!