Market Buoyed by Data Releases

A combination of better than
expected Chinese export growth and German Industrial production has
boosted appetite in the markets and led to EUR/USD driving higher
yesterday.  In addition overnight it has been confirmed that
Australian employment data came in hugely better than expected
again boosting risk appetite and leading to gains in the AUD in
early trade. 

In other news the NZD fell after
the central bank confirmed that they intervened last month to
protect the NZD from further appreciation.  However with
interest rates still high compared to the west at 2.5% and limited
ability to intervene on a large scale the NZD is not expected to
depreciate too much but the move will make speculators think twice
before going long NZD.  Elsewhere the Polish Zloty gained
ground after the central bank cut interest rates in a surprise move
to try to boost growth.

Focus for today will be on the Bank
Of England interest rate decision, however it is not expected that
we will see any change to interest rates or to QE which will hold
at £375 billion.  The recent uptick in economic data in the UK
through PMI and GDP coming in better than expected underlines the
reasoning to hold firm.   We also have industrial and
manufacturing production data due out of the UK this morning which
is expected to be weaker than previous releases. From Europe we
have the ECB monthly report which although not likely to surprise
will be eyed just in case and finally we have US jobless claims
which are expected to show an increase in claims.