Profit taking

Higher yield assets like equities, commodity currencies and commodites peaked end April.

With no prominent fundamental (economic) data in sight till

• Thursday - BoE and Euopean monetary policy meetings and
• Friday - US Non farm payrolls

Global investors booked their profits. The increase in ( 3 x higher) Silver margins triggered a sell off in Silver, triggering next. Gold, Energy and other commodities. This may have lead a sell off in equities in Asia, Europe and US, finally globally. The USD index also slumped to a 3 year low!
In other words, we notice some unwinding of carry trades.

Unless there's a surprise coming out on Thursday and Friday, with QE2 coming to an end in June 2011, my speculation is that higher yield assets will continue to head North.

We will have a better picture (by end Friday) where the financial markets will be going. Meanwhile, we will have to sit and wait for events to trigger.