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Trend of risk appetite remains intact, although we are seeing a slight pullback today. Yesterday, the S&P closed above 1000 for the first time since the financial crisis began. As expected, the US GDP on Friday and corporate earnings releases (UK banks) had investors rushing into risk correlated assets. US ISM surprised to the upside yesterday, which sent the USD and JPY lower, as good news for the US is still bad news for the USD. The EURUSD posted new 2009 highs and is on course to test its Dec 09 peak near 1.4715/20. The USDCHF is looking to trade below 1.0590, which will be decidedly USD bearish. However, today we are seeing European equity heading south and US futures are pointing to a lower open. Correspondingly, commodities are also coming off their intraday highs as markets brace for a short term correction. After today's short pause in risk correlated asset buying, we expect to continue upwards, which will keep safe haven currencies like the USD and the JPY under pressure. Today's news from Australia should be mid term supportive for the AUD. First was the RBA holding rates steady at 3.00%, as was universally expected. However, the central bank shifted from an easing bias to a neutral tone in the accompanying statement. At this meeting, the RBA removed the statement, "the outlook for inflation allows some scope for further easing of monetary policy." But they also hinted that rates would stay low for an extended period of time stating "....period of sluggish (growth)" and "and growth is likely to firm into 2010." While the markets 30bp of hikes in 2009 seems slightly over optimistic, we expect the bet is not far off. Second was the Australian Treasurer Swan announced that restrictions on foreign investment into Australia will be reduced. The AUD traded higher in the Asian session, but as the core driver in FX is still risk appetite, waning demand of risky assets send the AUD and commodity currencies lower. Today the important news would be the Personal Income and Spending readings from the US where the Income data is expected to decline by 1% (the most since 2005) and the spending levels to rise for the second straight month by 0.3%, although with consumers saving more, a drop in data cannot be ruled out which could bring in a wave of risk aversion.