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U.S. Equity markets are under pressure this morning as sellers showed up after Japan reported a weak GDP figure. Treasury Bonds are trading higher in response to the possibility of a weaker global economy.

The U.S. Dollar gave back much of its earlier gains Tuesday afternoon after the central bank’s Federal Open Market Committee revealed a disappointing outlook for the U.S. economy.

Despite a disappointing U.S. jobs report, the USD CAD is trading sharply higher due to an unexpected decline in the Canadian jobs market. The news out of Canada reflects its first job losses of the year.

On Thursday the Bank of England policymakers voted to leave its benchmark interest rate at the historically low 0.5%. This move was expected because BoE officials are still unsure what the effect the newly implemented austerity measures will have on the economy. Furthermore, there is still uncertainty over what the upcoming new taxes will have on economic growth.

On Thursday the Bank of England policymakers voted to leave its benchmark interest rate at the historically low 0.5%. This move was expected because BoE officials are still unsure what the effect the newly implemented austerity measures will have on the economy. Furthermore, there is still uncertainty over what the upcoming new taxes will have on economic growth.

The Australian Dollar surged on Monday as rising equity markets drove up demand for higher yielding assets. Traders are also chasing the higher yield in Australia due to the weaker outlook for the U.S. economy.

U.S. equity markets are trading lower this morning ahead of the opening in New York. Although the markets closed higher on Tuesday, they started to peel back gains about mid-session on concerns about consumer discretionary stock losses and a slow down in global growth.

The EUR USD is posting a strong gain this morning after Spain announced that it had sold out $4.3 billion of five-year bonds. The news is evidence that appetite for government debt is still strong and that perhaps the fear of holding European sovereign debt risk may be abating.

The EUR USD rallied sharply higher on Wednesday after the European Central Bank reported that demand for three-month loans by member banks was weaker-than-expected. This news came as relief for traders who were looking for European banks to be a little more active at the lending window given the bleak outlook for the Euro Zone economy.

The U.S. Dollar is trading sharply higher against most major currencies as investors shed risk, encouraged by the news that China’s Leading Economic Index missed pre-report guesses, signaling that growth in the country is not likely to accelerate.

Global stock markets are under pressure overnight which is leading to expectations for a lower opening in the U.S. this morning. Traders are also expected to react to this morning’s durable goods and Weekly Initial Claims data. Flight to safety buying is helping to underpin the Treasuries. The Dollar is posting gains against the Euro and Dollar-linked currencies.

The U.S. Dollar is trading weaker against most majors this morning ahead of this afternoon’s Fed announcement. Volume is expected to be light, but traders should expect increased volatility because of thin trading conditions.

Stocks and commodities are set to surge today after China loosened its reins on the Yuan over the week-end. Although the timing of the move by China to allow its currency to appreciate against the Dollar came as a surprise, the action followed months of serious negotiations between the U.S. Treasury and the Chinese government.

The U.S. Dollar is trading mixed against the major currencies ahead of the U.S. opening. The Greenback is posting gains versus the British Pound and Japanese Yen while showing a slight loss versus the Euro and an even bigger decline against the risk-related currencies.

Thin trading conditions ahead of the U.S. Non-Farm Payrolls Report on Friday and less than stellar economic news from the Euro Zone helped to weaken the Euro on Thursday. The lack of fresh news from the Euro Zone regarding debt issues is encouraging investors to return their focus to the basic fundamentals.