A mixed session out of Asia with not one market providing a clear sense of direction! The Nikkei and Shanghai spent the day flip-flopping between red and black whilst the Hang Seng saw selling throughout the day. All core European Indices returned negative performances today, with declines between -0.2% and 0.6%. The US opened weaker after yesterday afternoon’s bounce  some profit-taking ahead of PMI and Sentiment tomorrow, in what has been a reasonably heavy stat’s week. Worth mentioning here that tomorrow we also see Eurozone Inflation where expectations are for a 0 (zero) print with previous being -0.1%.

Commodities had a fairly dull day today with Oil only marginally firmer at $46.10 (TWI). Gold, on the other hand, was not the flavour of the day, rejecting all attempts to rally earlier in the day and was last seen trading $1146.

Bonds on both sides of the Atlantic were weak with US 10’s losing 8bp and Bunds 9bp. US 10’s have had problems with the psychological 2% barrier for a while now and still remains allusive ground. The spread TY/RX closed this evening at +160bp. The curve steepened in the sell-off with 2/10 closing +143bp and 10/30’s at +80bp (that puts 30’s around the 2.95%).

The Euro recovered a little of yesterday’s loss (last seen at 1.0978), as did GBP. These gains managed to turn the DXY negative on the day -0.5% at 97.35.

We heard a lot of talk today of the Philips Curve (measuring employment with inflation) and whether the Fed is actually looking at domestic or indeed international matters. One dealer was concerned the FED has been referring more to markets more than domestic data!