Dow Jones: Still range bound with the upside capped, for the time being, unless the index can break through key resistance at 9000.

Yesterday, the factors that supported the rally since March came back into the vogue. The most surprising of these was San Francisco Fed Yellen stark comment that “it is not outside the realm of possibilities that the fed funds rate could stay at zero for the next couple of years”. This, for the time being at least, has relinquished any near term thoughts that stimulus could be taken off the table too early.

In addition, the global PMI readings would suggest that the global economy is at last beginning to find its feet. Of particular note was China’s PMI reading up 0.1 points to 53.2. This would suggest outright growth coming through in China and leaves it on track to reach its 8% GDP target.

Today, attention is focused on US non-farm payroll data. Yesterday data from ADP Private Payrolls and the Challenger report has not changed the consensus forecast which remains at -365K and a rise in the unemployment rate to 9.6%.

Sources: Reuters: Bloomberg: Lawshare: Deutsche Bank (db): Proquote: Financial Times: Wall Street Journal: CLSA: Sharescope: Market News. Capital Economics: CNBC: Wikipedia:

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