Themes

• General mood is “risk off”
• USD remains firm in Asia
• Australian Wage Price Growth at +0.6% from talk of +0.5% q/q

What’s Moving
Very quiet session in Asia, despite the market opening with a strong USD after gains in New York. Late afternoon trade saw the EUR/USD hit a fresh 16-month low, but the USD/JPY largely failed to extend four-year highs posted in U.S. trade.

Europe

• U.K. PPI and CPI both due tonight
• Canadian CPI also slated for release tonight
• U.S. will release Housing Starts and Building Permits

We expect London to wait for fresh U.S. leads on movements after Asia largely failed to extend overnight gains. EUR/USD weakness into late Asia is probably coming form early London trade, but short-coverers will come in to support the downside ahead of the U.S. open.

Sterling might be the big mover in London, largely holding recent ranges and brushing off movements on the Big Dollar. We are still bullish Sterling.