US indices resumed their downward course overnight after a pause yesterday, but have been bouncing around following the release of ADP payrolls that came in somewhat below expectations suggesting indecisiveness on what the results mean. ADP was not a total wipeout line Monday’s Manufacturing PMI, and could have been affected by the poor January weather but was disappointing enough to suggest that we could see a second month in a row of soft nonfarm payrolls Friday. Note the ADP December number was only revised down slightly so the underlying trend in employment remains generally positive. This jury appears to be out on what this means for tapering. Gold has rallied on the news while USD has turned in a mixed performance and indices have resumed their correction downtrends. Market action across Europe has been mixed today ahead of tomorrow’s Bank of England and ECB meetings. Soft UK service PMI has taken more of the pressure off of the BoE to raise interest rates boosting the FTSE while dragging on GBP. Talk of extending the maturity on Greek debt to 50 years and cutting the interest rate just after the country posted its first PMI above 50 in nearly 5 years suggests that crisis conditions continue to ease and that the ECB may not need to cut rates. Low inflation may also not necessarily force their hand to stimulate further as it may be a result of the stealth taper the ECB has been running for the last year anyway. Poland’s central bank maintained its benchmark interest rate today. The bank’s refusal to panic reminds the street that not all emerging markets are the same and that while some countries may continue to have problems, it doesn’t mean that all emerging markets will be affected equally. Between the employment reports, another flurry of earnings reports and tomorrow’s central bank meetings the potential remains for significant market activity and opportunities for trading right through the rest of the week. Corporate News There are a few earnings reports out overnight but the main event by far today is Twitter’s first earnings report due later this afternoon. Twitter has more than doubled following its IPO and this will give traders their first opportunity to see if the numbers can justify all the hype and high valuation. Time Warner $1.17 vs street $1.15, raised dividend 10% Merck $0.88 vs street $0.89 Economic News Economic reports released overnight and this morning include: US ADP payrolls 175K vs street 185K, previous revised down to 227K from 238K Eurozone retail sales (1.0%) vs street 1.5% Poland interest rate decision 2.50% no change as expected Service PMI results include: Japan 51.2 vs previous 52.1 India 49.6 vs previous 48.1 Spain 54.9 vs street 55.0 Italy 49.4 vs street 48.9 France 48.9 vs street 48.6 Germany 53.1 vs street 53.6 UK 58.3 vs street 59.0 Brazil 49.9 vs previous 51.7 Eurozone retail sales (1.0%) vs street 1.5% Poland interest rate decision 2.50% no change expected Economic reports due later today include: 10:00 am EST US ISM non-manufacturing PMI street 53.7 vs previous 53.0 10:30 am EST US crude oil inventories street 2.5 mmbbls 10:30 am EST US gasoline inventories street 1.1 mmbbls

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