China Saves the Day for ow; US GDP Revision Next.

Risk appetite stabilizes after news that China showed interest in Portuguese

and New Zealand investment. Later, the London session showed indecision as price consolidated within unusually narrow range.

J.C. Trichet once again reiterated that ECB is monitoring price level and will do whatever necessary to avoid second round inflation effects. EURUSD did not respond much but the Spanish/German 10 year yield spread narrowed by 13 bps providing support for the euro.

In Switzerland, trade surplus increased from 1B to 1.52B but still came slightly below expected 2.0B and employment level q/q marked another slight improvement to 4.11 from previous 4.09M.

New York session will see eagerly awaited US Preliminary GDP q/q

released at 8:30 am EDT. Markets expect an improvement from last 1.8% to 2.2%. Given the rise in NFP and significant drop in unemployment seen over the past few months, the GDP data should not disappoint despite many, rather poor recent US economic releases.

Estimating whether USD will be able to resume its uptrend should the GDP data come as expected is difficult. Yesterday, the USD was not able to benefit from ongoing EZ problems and doubt inducing comments about Greek exit from EZ. Later, after the Chinese news, the greenback dropped sharply. This could be interpreted as diminishing USD momentum and possible change in bias.

GDP will steal the show but 8:30 am also marks the release of unemployment Claims that are expected to improve from last 409K to 403K.

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