Last night the Dow Jones managed to close higher for 5th day in a row, the rally has legs it seems.

However there is still some way to go before we can safely say we’re out of the woods. The Dow Jones spreads recoveries have got shallower. The last rally lasted 200 points more before faltering.

Today presents a stern test for both the stock markets and currency markets with a big slug of heavy economic data due along with the start of earnings season.

We’ve already had UK RICS house price balance disappoint – it came in much lower than expected. More bad news for the faltering UK house price recovery. Next up is UK CPI & Core CPI due at 09.30, with both inflation measures expected to drop by 0.2% on last month’s numbers.

Also keep your eye out for any reaction to MPC member Sentance’s speech at 13.30 PM. Andrew Sentance is the lone voice urging rate hikes to stem UK inflation before it gets out of control. If the above Consumer Price Inflation numbers comes in significantly above estimates, his words could have even greater impact.

From Europe we have the hotly followed German ZEW economic sentiment at 10.00. The German economy has been recovering well so a strong number is hoped for.

Then at 13.30 we have US and Canadian Trade balance numbers. Can Canada trump the US again as it did with last week’s jobs numbers?

After the closing bell we have the latest earnings numbers from chip giant Intel.

Forex Trading

It’s pretty quiet out there so far this morning. The exception is the Aussie dollar which is selling off at reasonable pace against both the yen and the US dollar.

The Australian Dollar/Yen spread has been rangebound for the last few day with &yen78.00 acting as resistance. $0.8800 has been acting as resistance on the Australian Dollar/US Dollar spread.

The GBP/USD recently broken below its upwards trend channel after last week’s sting of disappointing economic data points.

The EUR/CHF has been rangebound for the last week or so after the Swiss Bank re-started its direction interventions in the market. The range can’t last forever though.

The Financial Fixed Odds update by David Evans, Market Analyst, BetOnMarkets.

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