US markets closed Friday up around 1%, which in the context of recent volatility is not really much to write home about. Recently, US markets have had an average trading range of 2% per day, which is actually down on the recent peak of 4% per day. In volatility terms, things seem to be quietening down, and this is usually a positive for equities which loath the unknown more than bad news. When the economic data becomes more predictable, markets can move to price in bad news, as appears to have happened today.

Markets finished up on Friday, which is not what one would have automatically expected from the release of the highest US unemployment numbers for 25 years. Wednesdays ADP job numbers gave traders a reasonable steer on Fridays data, so traders werent entirely shocked by the announcement. Fridays job numbers were very weak though, theres no getting away from that. What is most concerning is acceleration in unemployment. Anecdotally many people across the world have been saying the saying the same thing the shocking thing about this global recession is how quickly things have developed to point of near depression levels. In the US 5.1 million jobs have been lost since the recession started, but two thirds of these happened in the last 5 months. It would seem that this has been a similar pattern across the world. With Thursdays agreement from the G20 to inject huge sums of cash into the global economy, world governments are hoping to stem the speed of the collapse at the very least.

Elsewhere, the long awaiting FASB announcement on Mark to market accounting rules were released with positive implications for the banks. Some analysts believe the rules changes could increase banks net income by 20% or more. In addition to this, news that the UK government has agreed to back some of RBSs business loans and the decision by Barclays to not participate in the governments asset protection scheme made it a good week for financial overall.

There was mixed news on the UK housing market with the Nationwide saying house prices rose nearly 1% in March, but Halifax saying that prices dropped 1% in March. The differences underline the volatility in month to month housing data.

The ECB ruffled some feathers by cutting rates in the eurozone by just 0.25% to 1.25. Trichet commented that rates could still go lower in coming months, but the ECBs adoption of a ZIRP policy is noticeably slower than the UK and US. Although businesses would have appreciated lower rates, investors seem to have interpreted the ECBs action as meaning that the European economy is in better shape than many thought. The news fueled a rally in the euro against the yen and dollar, but it is the pound that was last weeks strongest performer overall. Sterling rose against all major currencies over last week.

Next weeks economic highlights include rate decisions from the Bank of Japan and Royal bank of Australia on Tuesday, followed by rate statement from the MPC on Thursday. Analysts are currently expecting no changed from any of these meetings. In addition the minutes from the last FOMC meeting are released on Wednesday. Thursday also brings UK PPI and US trade balance figures. Friday is a bank holiday for most countries.

Gold has remained in a relatively tight trading range over the last month or so a break out could be overdue.

Monday April 6th:

EU -08:30 – Sentix Investor Confidence.
EU -09:00 – Retail Sales M/M.
EU – 09:00 – PPI M/M.
US – 17:00 – FOMC Member Warsh Speaks.

Tuesday April 7th

UK – 08:30 – Manufacturing Production M/M.
UK – 08:30 – Industrial Production M/M.
US – 14:00 – IBD/TIPP Economic Optimism.
US -19:00 – Consumer Credit M/M.
UK – 23:01 – Nationwide Consumer Confidence.
UK – 23:01 – NIESR GDP Estimate.

Wednesday April 8th

GE – 06:00 – Trade Balance.
FR – 06:45 – Trade Balance. .
UK – 09:30 – BRC Shop Price Index Y/Y.
GE – 10:00 – German Factory Orders M/M.
US – 14:00 – Wholesale Inventories M/M..
UK – 14:30 – Crude Oil Inventories.
US – 18:00 – FOMC Meeting Mintues.

Thursday April 9th

GE – 06:00 – Final CPI M/M.
EU – 08:00 – ECB Monthly Bulletin.
UK – 08:30 – PPI Input M/M.
UK – 08:30 – PPI Output M/M.
UK – 08:30 – Trade Balance.
UK – 09:00 – CB Leading Index M/M.
GE – 10:00 – Industrial Production M/M.
UK – 11:00 – Official Bank Rate.
UK – 11:00 – MPC Rate Statement.
US – 12:30 – Trade Balance.
US – 12:30 – Unemployment Claims.
US – 12:30 – Import Prices M/M..
US – 14:30 – Natural Gas Storage.

Friday April 10th

Bank Holiday EU/ FR/ GE/ UK

FR – 06:45 – Industrial Production M/M.
FR – 06:45 – CPI M/M.
FR – 06:45 – Gov Budget Balance.
US – 18:00 – Federal Budget Balance.

EU – Europe wide
FR – France
UK – United Kingdom
US – United States
GE – Germany