ReportMarkets have been relatively quiet on Friday thus far, with investors seemingly content to allow for some consolidation ahead of the highly anticipated US non-farm payrolls report due out in the North American session. Overall, the reaction to Thursday’s central bank event risk has been rather positive, with officials sending a message that they are addressing the current economic crisis and taking measures to provide as much accommodation and structural reform as needed. The Bank of England made this clear after unexpectedly upping its asset purchase target by GBP75B to GBP275B, while the ECB turned up its liquidity dial for banks, and announced the renewal of its covered bond program, amongst other things. The bank recapitalization talk in the eurozone is also helping to bolster sentiment somewhat, and the Euro has found its way back above 1.3400 thus far.

However, as we wrote on Thursday, any rallies in the euro and currencies in general should continue to be very well offered, with the markets far from out of the woods and these newly implemented central bank measures only reminding us of just how bad things really are. On that note, recent reports cite a tension between Germany and France on whether the EFSF should have limits on government bond purchases. Meanwhile, the saga in Greece lingers on, with the country hanging by a thread as the risk of default still remains quite real, with bailout talks still in progress. Elsewhere, Dexia has been getting some negative attention after the troubled bank was downgraded by S&P.