Watch List – Some Upcoming sessions
Yesterday's figures in the US were just about as good as they could possibly have been. Much stronger than expected Nonfarm Productivity growth and well contained Labor Costs. Who could have hoped for that? It might even resemble the theme/talk from the "old" bull market in equities in the end-ninties where the US economy allegedly had entered a new economy with eternally high productivity growth and negligible inflation. Bulls might even argue that with these kind of figures, there would be no need to worry about the faltering housing market.
Expectations for today's figures in the US (Nonfarm Payrolls and Unemployment Rate) are quite low and it looks like stock traders are in a mood where bad news does not count and where goods news will spark additional long interest.
If Nonfarm Payrolls come out above the expectation around 100K, the USD should be headed higher, which should be supportive for expecially the USD-sensitive DAX.
The presidential debate in France between Segolene Royal (socialist) and Nicolas Sarkozy (centre-right) was not really affecting ratings or opinion polls, but the fact that the previous candicate, Bayrou, now openly said that he would not support Sarkozy could be a potential turning point for the political equilibrium. CAC is still at risk of a sell-off or just sustained underperformance, if Royal makes it to the Presidential seat.
In that case, we would consider to enter a Short CAC / Long DAX trade or something similar. Royal as a French president is also a potential negative for the EUR, which is already losing momentum. That should support the potential for a Short CAC /Long DAX trade.