[RISK APPETITE] has been
By[RISK APPETITE] has been revived, encouraged by a positive mix of US
data in which a sharp fall in wkly jobless claims suggested the labour mkt
could well be improving. Consumer confidence also rose, whilst a slowing
in the core PCE index to a record low and weak new home sales supported
Fed's QE2 case. US stocks chalked up a strong performance, with S&P ending
a lofty 1.5% higher, whilst commodities bounced back solidly, led by a
surge in oil prices by over $ 3 to above $ 84/brl. UST ylds have also risen
sharply, with 10yr leaping 13bps to 2.91%. Moves have been exaggerated by
below norm pre holiday volumes; and we need to warn that Korean tensions,
Europe's debt woes and a potential China tightening are still simmering in
the background. That said, Asian bourses are likely to play catch up to
the positive o/n leads. Otherwise, commodity ccies and Yen crosses are
being favoured, whilst Euro remains the weakest link
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