Stocks rallied overnight after the Australian economy showed more than expected second quarter growth and China’s PMI was reported stronger than estimated. Both reports triggered a surge in demand for higher risk assets overnight which led to the sharp rise in equities.

U.S. equity markets traded sideways to lower for several hours before this morning’s lower than expected ADP report. The headline news appeared to be bearish but stocks tested the earlier high for the day anyway before starting a slight sell-off. The real test this morning will be whether U.S. investors chase this market higher or wait for a pullback ahead of Friday’s Non-Farm Payrolls Report.

The September E-mini chart pattern suggests that there is room to rally to 1077.25 over the near-term, but the question remains will U.S. investors take a side in this market ahead of Friday’s jobs data or will last night’s and this morning’s reports be enough to scare shorts out of their positions.

Demand for risk is pressuring the Treasurys this morning. The September T-Bonds briefly cut losses after the ADP report, but yields remained higher.