Themes

· General mood is “risk off”

· U.S. Factory Orders as expected at -0.5%

· ECB’s Knot: ECB should act in the fact of rising inflation

What’s Moving

A largely quiet session on currencies overnight, with the two exceptions being the Euro and the AUD. The Euro saw some selling pressure after breaking the key 1.1000 technical level, with little help seen from hawkish comments from ECB member Knot. The Aussie was supported by a bounce in both gold and oil.

Other currencies held tight ranges after the market shrugged off as expected U.S. Factory Orders.

Thoughts

Another holiday in China and a lack of clear direction should see another quiet session on currencies today in Asia, although players will eye whether there is short-covering or follow through sales on the Euro.

Events today include:

· Japanese Household Spending (E: +2.8%)

· RBA Rate announcement (E: no change)