The title of today’s note may sound like alphabet soup but all those letters have significant implications for trading today. With pretty much all markets in Europe except for the UK closed today for the May Day holiday, all focus turns to the US today. And what a day for potential news! It’s rare that an FOMC meeting does not take top spot, but at this point, traders appear to be more concerned about the implications of a slowing US economy on future FOMC decisions than today’s apparent no brainer with no changes expected. March data was disappointing but could be blamed on sequestration kicking in and a slowing in corporate spending. Traders now look to the April data to see if March was a one-time event or a start to a more difficult period for the US. Disappointing April numbers like today’s ADP shortfall further reinforces the need for monetary stimulus to offset fiscal austerity. It also any thoughts of an early end to QE3 to bed and opens the door to the potential for additional measures. Falling commodities suggest that the impact on resource demand from a slowing global economy remain a worry. Even with all of today’s big events, speculation of what may happen at tomorrow’s ECB meeting may also have an influence on some markets. The ECB is widely expected to announce a 25 bps cut to interest rates to try to deal with slowing core economies, although a rallying EURUSD suggests that many traders think otherwise. It’s also unclear what impact, if any, such a move may have on economies other than a placebo effect. This all suggests that regardless of what happens some traders are likely to be caught offside tomorrow which could set the stage for significant action off the ECB news. Tomorrow’s manufacturing PMI numbers from across the continent but particularly from Germany and France may indicate how much pressure politicians and central bankers are under to do something, anything to try to get the economy moving again. GBP continues to outperform, climbing on the back of a UK manufacturing report that was not as bad as had been feared. Economic News Significant economic announcements released overnight include: US ADP private payrolls 119K vs street 158K US Markit manufacturing PMI China manufacturing PMI 50.6 vs street 51.0 and previous 50.9 UK manufacturing PMI 49.8 vs street 48.5 Australia commodity prices (6.5%) vs previous (7.5%) Economic reports due later this morning include: 10:00 am EDT US ISM manufacturing PMI street 50.9 10:00 am EDT US construction spending street 0.7% 10:30 am EDT US DOE energy inventories 2:00 pm EDT US Fed interest rate decision no change expected CMC Markets is an execution only service provider. The material on this site (whether or not it states any opinions) is for general information purposes only, and does not take into account your personal circumstances or objectives. Nothing in this material is (or should be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by CMC Markets or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.