The story of the moment continues to be sovereign debt and will continue to be so with Greece passing austerity measures, and Germany's refusal to countenance any sort of aid package, as both country's leader's wrestle with political pressures that restrict their room for manoeuvre.

Greece did succeed in offloading €5bn Euros of 10 year bonds but it had to pay a risk premium of around 300 basis points over the German equivalent to do so.
However, predictably Greek unions have responded angrily, calling strikes for Friday while some trade unionists occupied the finance ministry preventing access. It should certainly make for an interesting meeting in Berlin tomorrow between Merkel and Papandreou.

The European Central Bank predictably left rates unchanged, after Euro zone Q4 GDP was confirmed at 0.1%, maintaining that rates remained at the appropriate level, which may be true for France and Germany, but certainly isn't for the peripheral countries.

The Bank of England also unsurprisingly left interest rates unchanged and kept quantitative easing on pause, which given the somewhat better data seen over the past few days was pretty much expected.

US data was again a bit of a mixed bag ahead of tomorrow's employment report with existing home sales unexpectedly falling 7.6%. However the market shrugged this off after factory orders came in at 1.7%, while the weekly jobless figures came in pretty much as expected at 469K.

Both the UK and US have key data announcements tomorrow with the UK expected to show year on year producer prices for February to have increased to a 14 month high of 4.1%. The monthly figure is expected to show an increase of 0.3%. In the US we await the non-farm payroll data which is expected to show a decline from anywhere between -65k to -30k. The unemployment figure is expected to remain unchanged at 9.7%.

Given Wednesday's ADP data, which surprised on the upside for February, has offered the hope that tomorrow's figure could also surprise on the upside, though there may be a revision lower of the January figure, as there was on the ADP January data.

EURUSD - the Euro has traded sideways today although it has drifted back in afternoon trade after failing to sustain gains above 1.3700 overnight. The focus of attention remains on Friday's meeting of Merkel and the Greek Prime Minister. The sovereign debt problems remain the key drag on any Euro rallies, with resistance also at 1.3780, though the risk of a move towards 1.3890 trend line resistance from the 1.5145 highs has increased slightly, with the squeeze above 1.3700 over the past day. A break below 1.3570 would re-target the 1.3450 lows. On the downside the key level remains 1.3485 on a daily close, a break of which targets 1.3200.

GBPUSD - the pound continues to sustain itself above the broad 1.4980/1.5020 area and remains susceptible to a rally towards the 1.5270 resistance area, after breaking back above 1.5000. A break below 1.4980 re-targets the key level on a daily close at 1.4850 which is the 61.8% Fibonacci Retracement of the up move from 1.3500 to 1.7045. A break below here would re-target 1.4400, the 22nd April 2009 lows.

EURGBP - the November and December 2009 highs at 0.9150 are the key barriers to further Euro upside here. This week's rally stalled at this level and remains a pivotal point with respect to further sterling losses. Euro dips should find some buyers around 0.8980 and 0.9020.

USDJPY - the area around the 88.15/25 area managed to hold, and has provoked a bounce back towards cloud resistance at 89.30. If the dollar is able to sustain this move higher it could well be set for a bounce back through 89.30 back towards 90.00. A break of today's lows targets 87.70. Keeping an eye on the daily closing candle today could offer clues to longer term market direction here.

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