24 hours after markets witnessed a powerful 3.4% consumer component (highest since Q1 2007) in Q3 GDP, they will obtain a more current version of consumer performance in the Sep personal spending (12:30 GMT) exp -0.5% after +1.3% in Oct. Regardless of whether the powerful 3.5% increase in the consumption component of US Q3 GDP was propped by cash-for-clunker programs and 1 st time home buyer credits, the figure was a sufficient temporary boost for risk assets at the expense of the USD and JPY. But reminders of prolonged losses from Sony and the fourth consecutive monthly decline in annual German retail sales may cast a pall on the overnight jump in risk appetite.

Yesterday we highlighted how EURUSD and S&P500 narrowly escaped a break below their respective 8-month support levels of $1.47 and 1,047. The US GDP report was instrumental in boosting equities and risk currencies. But today's US figures on personal spending, consumer sentiment (exp at 70 from initial 69.4) and Chicago PMI (exp 48.5 from 46.1) will be key in determining the extent of yesterday's recovery in risk assets. Short of a close above 1,075 in the S&P500 and 10,000 in the Dow would keep the question mark for yesterday's rally.

But markets are already doubtful. Overnight stabilization in the Japanese yen resulted from bank of Japan 's vote to stop buying corporate debt by year-end. The second monthly straight decline in Japanese unemployment helped prompt the BoJ to vote in favour of withdrawing some liquidity. Nikkei futures dropped back below 10K, Dow futures off 21 pts while S&P500 futures -2.6 to 1061.

US crude unable to above the $80.40-45 , which is the low on Oct 22-23 and Oct 20. A close above 81 will be required for risk appetite to back up fresh selling in USD and JPY against the majors. Disappointing US figures today risk calling up 78.80.

USDJPY eyes support at 90.70 -- the trend line support, which held up successfully on Wednesday. A break below it would provoke additional losses towards 90.20. Any renewed negative readings in US consumer spending would support the notion that last month's increase was mainly driven by the now expired cash-for-clunker programs.

GBPUSD recovery still deemed doubtful as long as no rally above $1.66 is seen. Downside target starts at $1.6470.

USDCAD is vulnerable to a break below 1.0630, which could extend losses towards 1.0550 in the event of continued pick up in risk-seeking trades emerging from strong US figures later today.

CADJPY was able to recovery 80% of Wednesday's decline but resistance remains imposed at 86. Downside risk suggests fresh retreat towards 84.80, followed by 83.90.