The Non-farm payroll number came above consensus. And more important, the Labour Department revised up numbers for both April and May. All in all, the US economy is in a pretty healthy shape. Bond yields continue to creep higher as a result of the strong labour report. Oil also closed higher again and now is above $73. Gold sector is doing pretty well today as some major gold mining companies decide to remove hedging program. Since this week is a holiday shortened week, real action will take place next week.

The market continues to move within a very narrow range. Oil closed above $72 despite bearish inventory reports. On the other hand, bond price dropped and yield moved up by almost 10bps after some of the fear factor being removed. ECB kept its rate unchanged while Bank of England raised its key rate by 25bps to 5.75%, both of which had been expected by market so had little effect on the foreign exchange market. Tomorrow will bring in this week's biggest economic report --- the Non-farm payroll. Based on this morning's ADC report, tomorrow's report should be pretty good. However, good report may not necessarily be a good thing at this stage of economic cycle.

US holiday. No comments today.  

Major US markets will close at 1pm in observation of the Independence Day and will remain closed tomorrow. It is not surprising that markets keep moving up in very light volume despite oil stays above $71 and the 10-yr yield goes up by almost 5bps. Believe it or not, Nasdaq is hitting another 6-year high today and should be closed at new 6-year high. Dollar has weakened recently against Euro and Yen, which by itself should provide some supports to commodity prices. The yield spread between T-notes and high yield bonds has widened from 310bps to 330bps last week, reflecting continued nervousness regarding subprime loan issues. The biggest economic report this week is Friday's Non-farm payroll and it should continue to show strength in the US labour market. Since it is a holiday shortened week, real action should not take place until next week.