It was a day of sinces yesterday. Many markets hit levels not seen in months and months as the global risk recovery shifted a gear with the dollar the victim of some hardcore selling.

The biggest indicator was the S&P 500 hitting 1000 for the first time since September, the FTSE Emerging Market Index moved to levels last seen on September 12^th, the eve of the Lehman collapse and the FTSE 100 hit the highest level of the year so far.

With equity bourses, commodity markets and other risky assets in correlation and moving higher it is a foregone conclusion that FX markets will follow and that the dollar will be sold heavily against the more risk happy currencies of the world such as AUD, NZD and of course GBP.

In the first bit of central bank news this week the RBA held rates at 3.0% with the MPC shifting to a neutral bias.

It wasn’t only dollar weakness that saw GBP rise yesterday as Manufacturing PMI from the UK hit 50.8 for the month of July moving into expansionary territory for the first time since March 2008 leading a lot of people to suggest that the worst of the recession is over or certainly for the UK economy. US ISM was also strong but is still sat in contractionary territory.

A PMI from the Construction industry is due today at 09.30 and hopefully can follow the move into expansionary territory that we saw yesterday. We also have PPI from the Eurozone and PCE from the US.

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