A mixed session o/n with the Nikkei trading unchanged and USD/YEN pushing back to 107. The G7 warnings on growth cast a pall over European shares on Monday, but the US market seemed to take a ‘What, more bad news? Whatever…’ view to the matter, which may actually suggest that the market has priced in enough bad news for now, hmm… For the FX market the focus is on the UK CPI figures this morning, as the uptick in the PPI on Monday started to close the door (a little) on BoE aggressive rate cut expectations. If CPI comes in on the high side the BoE may be reminded of their inflation fighting mandate, and the GBP may firm up a touch. The German ZEW survey will be worth watching as well for clues on sentiment, but will the ECB blink? On the charts still like EUR/GBP to crack towards 0.74, then down to 0.7280 and lower. Cable looks to be trying to consolidate, maybe 1.96 will be seen for another selling oppty? EUR/USD upticks ran into selling yesterday, favoring limited upticks still with 1.46 to hold, a turn towards 1.4380/66 for 1.43 still seems on here. USD/YEN should see pushes towards 108, 112/114 remains open as the USD seems to be trying to form a base… EUR/YEN looks to be basing ahead of the 153/152 zone, see if a push to 160 can build… NZD/CAD is starting to push higher again, favoring a break to 0.80 for 0.84 still, on the view that the RBNZ may need to nudge rates higher again, BoC will be leaning the other way despite the strong jobs figures…
