Non Farm Pay Rolls

Name Price Chg %Chg
FTSE 100 5291.26 189.09 3.71%
Dow Jones IA 11123.33 183.38 1.68%
NASDAQ 2506.82 46.31 1.88%
DAX 30 5645.25 172.22 3.15%
CAC 40 3075.37 101.47 3.41%
AEX 466.26 12.96
GBP/USD 1.54 41/46 -0.00 -0.15%
GBP/EUR 1.14 91/95 -0.01 -0.81%
EUR/USD 1.34 36/37 0.01 0.70%
USD/CHF 0.92 07/11 -0.00 -0.27%
USD/JPY 76. 63/66 -0.18 -0.23%
GBP/JPY 118.3 32/37 -0.44 -0.37%
Gold $/oz 1651.22 14.41 0.88%
Silver $/oz 31.938 1.64 5.42%
Platinum $/oz 1505.25 37.50 2.55%
Palladium $/oz 601.75 31.50 5.52%
Brent Oil $/barrel 105.6 3.16 3.08%
WTI $/barrel 82.49 2.83 3.55%

Having touched a low of 10400 yesterday the Dow rallied up through the day after an article in the FT iterating further consensus for a proactive resolution being reached on the debt situation in Europe.

Equities were given a further boost today, with the BOE announcing a 2nd quantitative easing plan, of a further £75 billion. With the FTSE currently at 5315. I also expect this to ACTUALLY BE BULLISH for the pound.

Given intial jobless claims were worse than expected today, and did not seem to phase markets (with more important BOE announcement) I think a worse than expected Non Farm Pay rolls result tomorrow would not be particularly bearish! I would anticipate support at Dow 11,000, and with earnings season due to commence, I think the potential exists for the Long Dow Short dollar trade to recommence into next week.

Medium Term trade at this point:

1)




Note how initially the market sold off sharply with the announcement. With the usual reaction (traders selling due to perception of increased supply of Pounds in the future, with QE 2)..followed by the realisation that this would potentially lead to an outpeforming British economy (as congress looking unliekly to show support for further QE measures in the US), as the pound pared its losses.





Buy GBP/USD at 15436 Stop 15150 Target 16000

Over medium term (next month)
Over shorter term (next week), could go for 15250 stop, and 15650 target

2)


NFP:

Long The Dow (over the next week) Look to buy into the Dow, tomorrow, prior to NFP, to avg a price around 11070, to target 11300 by close, and potentially 11500 next week if earnings beat.

Stop to be restricted to 10800.


Potential Trade Ideas:

Even though equities, could stage a substantial rally in the coming weeks, I think they will be lagged by commodities, owing to continuing fears over china, so I see the potential to combine a long risk trade such as long GBP/USD or long the Dow even, with shorting a commodity based dollar pair, potentially go long USD/CAD however it has rallied substantially recently, so I would be waiting for a pull back to close 1.02 before going in.






Given the potential for Gold to rally with a negative market response to the Greek bailout related news, I see good potential to Buy gold, and SELL commodity based currencies.