Usd was stable in Asian session after a massive sell off consecutive to Trichet's comments yesterday. EurUsd was range bound from 1.5580 to 1.5605 while UsdJpy bounced around from 105.56 to 106.25. Crude prices were slightly stronger trading to $128.50bll and gold also took advantage of the Usd weakness reaching $880.40oz. Commodity Bloc was firmer as AudUsd traded up to a high of 0.9610 while pressure on UsdCad eased slightly to 1.0163. Nok was the bigggest gainer as crude rallied with UsdNok breaking below the psychological 5.1000 lvl.

US Stocks snapped a three-day loosing streak to end higher Thursday after weekly jobs claims dropped more than expected and on upbeat May sales data from retailers Wal-Mart and Costco. Asian markets traded higher this morning. Energy producers and resource stocks climbed on a rebound in crude-oil prices. Shipping stocks rallied in Japan after a report in the Nikkei said growing demand could cause shippers to beat earnings expectations this year. The weaker yen was also supporting exporters. Korea is closed for Memorial Day.

As was universally expected the ECB held rates steady at 4.00% during yesterday meeting. However, it was Trichet comments in the post rate decision press conference which rapidly reversed the Eur decline. The first wave of buying occurred when he noted that risks to price stability had created an increased “state of alertness”. The second wave hit when Trichet would not rule out a hike in July. A signal to the market which sent the EurUsd up a big figure from 1.5440 to 1.5565. In late Asian trading the Eur seems to be gaining renewed momentum and today we expect Eur to stay firm through US data release.

The BoE MPC held rates at 5.0% as the market anticipated and released no statement accompanying statement. This decision was consistent with the previous inflation report which warned of increasing price pressure and headline CPI which hit 3.0% last month. While we don’t see rates heading lower in the near term the BoE will need to keep an eye on crashing economic data especially in the housing market.

While the RBNZ held rates steady at 8.25%, as was expected, the central bank accentuated its easing bias with a press release stating “we [RBNZ] are now likely to be in a position to lower the OCR later this year." The NZD came under considerable selling pressure as the market priced in a full 25bp cut by September. The combination of monetary policy easing and tougher domestic economic conditions will have the NZD on a weak footing.

The key data release today will be US private sector payrolls. An inherently volatile figure has only become more uncertain with Wenesdays ADP surveys showing a +40k rise. An important caveat is that ADP has overestimated the official forecast by roughly 80k average over the last 6 months but while the report has had some spectacular misses, it has at time has been spot on.