Jobless claims spook the markets ahead of Non Farm Payrolls today, Global risk aversion benefiting the Japanese YEN!

• Yesterday's trading was one of high on emotions as the US Jobless report came in worse than expected for the 5^th week in a row indicating a possible disappointing surprise in today's payrolls report. Coupled with sovereign risk concerns across Europe the markets sold off all their risky assets, DJIA -2.61%, NIKEI -2.90% and bought mainly to in to the YEN as a safe haven. The VIX, a volatility index used as a gauge for fear, closed above the 26 mark up from 21. In the US Kansas city Fed President Hoeing reiterated the need to change the FOMC language from ''extended period''. Overall USDJPY price action yesterday was between 91.07 - 88.53.
• In Europe we had the ECB rate decision were Trichet left interest rates unchanged whilst sounding slightly dovish overall. He did not indicate any future change in ECB policy and also reiterated the dollar strength mantra which he supports. In terms of growth he said it will be moderate and inflation was subdued. Fiscal concerns have shifted to Spain and Portugal while Greek concerns have subtly subsided for now. EURUSD price action was between 1.3900 - 1.3670.
• In the United Kingdom we had another rate decision were the BoE expectedly left rates unchanged at 0.5% and also announced a pause in QE operations. The pound was sold off ahead of the announcement on fears of a possible extension in QE however recovered following the meeting. As the session went on though the GBPUSD went on to break the 1.5832 support and traded to the 1.5700 October low as the USD benefited from risk aversion as well and the GBP was dragged down by GBPJPY selling also.
• Today the main focus of the day will be the Non Farm Payrolls report in the US expected to show 5,000 jobs been created for the month of January, worth noting that estimates range from -100K to +100K. In the UK we will have a number of PPI reports all expected to show an increase in prices of about 0.5%.

Currency to watch out for: EURUSD & USDJPY

• The EURUSD pivot point is at 1.3775 with a preference to enter into short positions at 1.3765
• The USDJPY pivot point is at 90.10 with a preference to enter short long positions at 90.05

Today's calendar and market movers:

• UK Core PMI for January expected at 0.3%
• Germany Industrial output for December expected at 0.5%
• Canada unemployment rate for January expected at 8.5%
• US Non Farm Payrolls -Net Change expected at +5,000 jobs created.

Now onto Stocks: 

• US equities closed negative yesterday day with the DJIA and the SP500 closing -2.61% % and -3.11% respectively.  The European burses were negative yesterday with the FTSE down -2.17% the DAX and the CAC closing negative at -2.45% and -2.75% respectively.  The NIKEI and the HSI at the time of righting is -2.89% and -3.01% respectively.