JAPAN

The Yen and Nikkei 225 experienced a surge in volatility after the BOJ released its policy statement, with the USDJPY climbing 60 pips and the Nikkei rallying over 2% in a few minutes as the BOJ surprised markets and altered its monetary policy. Gains were short lived as markets digested the news and were quick to trade at pre release levels as participants realized that the BOJ did not increase the monetary base and only added a new function of ETF purchasing which was not expected to alter anything in a significant manner. The JPY continues to gain ground across the board in early European trade as it appears the BOJ will be holding off on easing for a while longer.

US

Yesterdays data out of the US was flat to negative but this could not stifle the dollars strength as it edged higher across the board, gaining against all its counterparts. The strengthening dollar has finally filtered through with commodities and indexes which closed firmly in the red as they conform to conventional relativity with the dollar. Dollar bulls are expect to squeeze higher through the day, before booking profits ahead of the weekend, as todays calendar for the US is light with the Flash Service PMI expected at 55.9 being released ahead of FOMCs Lacker due to speak too.

UK

Steller retail sales (1.7% vs 0.6%) could not offer much support to the pound as political issues hover over head like a dark cloud. Britain's parliament is in a lock up with issues regarding their EU membership. further disconnect between the British and EU leaders will see the pound suffer further.

EU

Data out of the Euro Zone yesterday continued to disappoint as the German Ifo Business Climate figure came in worse than expect at 108.7 vs 109.2, indicating that confidence among business in the EU largest economy is still stifled. ECB`s Nowotny stating that European monetary policy is not determined by differences with the US, only triggered further selling of the EUR as the divergence of the two economies continues to widen.