The yield on the Two-Year U.S. Treasury has dropped below 0.5% for the first time in history.

Most of the attention today will be focused on how US equities react to the NFP data, but there are some other key indicators that deserve attention, specifically the US dollar and the Japanese yen.

Clive Corcoran anticipates that today will be one of position-squaring for the S&P 500 in anticipation of the data from tomorrrow's NFP report.

In the developing markets, inflationary pressures are beginning to create a tighter monetary environment which is having a spillover effect on equities.

With the possibility of more defensive positioning ahead of the NFP data, the risk/reward on the long side for US equities this week does not seem as attractive for position traders as it does for intraday traders.

The current level for the S&P 500 is quite signigicant. If this fails today then the July low would be a feasible target. If the level holds the bulls will have the opportunity during the thin trading levels of August to eventually test the 1130 level.

Clive Corcoran's favored speculative scenario for price developments going forward is for a gentle upward bias for equities and risk assets through August but with gathering clouds for risk aversion as September nears.

Should the S&P 500 make a decisive break through the obvious flat cloud top, which serves to underline the strength of the resistance at the 1130 target on the chart, then the absence of any further cloud above suggests that the bulls could really run with the ball during August.

The price action in a number of sectors suggests that equities are looking to move ahead, but Clive Corcoran has two main concerns with this scenario.

Part of the answer to whether the S&P 500 will come back to the 1130 level will become clearer in the price development of the CHF/JPY pair.