Much Noise And No Direction For EURO

This market is expected to ease into a cautious gear, especially after some of yesterday's sharp gains, and more specifically, ahead of some key events later this week. Economic fundamentals are unlikely to play a pivotal role ahead of the ECB and BoE rate announcement on Thursday and Friday's granddaddy of economic indicators, Non-Farm Payrolls. This week, this month, even this quarter is all about the US employment situation for June. The big question is whether employment is gaining enough momentum for the Fed to start thinking about slowing quantitative easing. It's believed by many that a healthy consistent gain of over +200k is needed for this to happen. How else are you going to get an unemployment rate to print sub +7% by next year?

Has the Fed won "half" the battle? Risk assets reacting positively to strong US manufacturing data on Monday (PMI 50.9) is rather telling. Investor's fears of reduced Fed bond buying or tapering and an eventual interest rate hike seems...